TBChap 008

Chapter 08
Market Segmentation, Targeting, and Positioning
Multiple Choice Questions
1. The company name Zappos was chosen because it
A.
was the founder's family name.
B. conveyed in Spanish the type of product sold.
C. inferred how quickly you could purchase the product.
D. contained letters from the names of the three founders.
E. reflected the brand name of the first line of shoes they sold.
2. The primary focus of Zappos' market segmentation strategy is to sell
A. a wide selection of shoes, clothes, accessories, and housewares to people who will
buy them online.
B. a wide selection of leather shoes and boots to retailers.
C. all types of shoes, accessories, and clothing to department stores.
D. Spanish novelties and accessories to organizations.
E.
shoes in its own retail stores.
3. The Zappos segmentation strategy is based on
A. offering the best selection of shoes and the best service to online shoppers.
B.
designing shoes for every type of occasion.
C. dividing all their customers into two distinct segments: people shopping for low
price and people shopping for style.
D. offering the best selection of shoes through multiple channels of distribution.
E. maintaining the simplest method of price points to make the purchase process
easy.
8-1
Copyright 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
4. Which of the following statements about Zappos is most accurate?
A. Zappos limits its inventory to a selection of high-end fashion footwear.

B. Zappos carries more than 1,000 different brands.
C. Zappos can guarantee overnight shipping to all its customers because they know
ahead of time what they will be charged for express service.
D. Zappos is so successful because it has chosen a single mission to "sell shoes and
nothing else."
E. Zappos offers a 30/60/90 return policy whereby refunds are based on how long you
have had the shoes.
5. According to Tony Hsieh, CEO of Zappos, the company devotes the greatest amount
of time to
A.
B.
C.
D.
E.
seeking out new and unusual styles of shoes from all over the world.
improving the website to make it faster, more interesting, and fun.
seeking out new markets that will go beyond the Internet.
finding the fastest and least expensive modes of delivery for its products.
finding ways to improve customer-service levels.
6. Tony Hsieh, CEO of Zappos, offers one month's salary to anyone who
A.
B.
C.
D.
E.
identifies a completely new market segment with a product to match it.

finds a way of improving service to online customers.
takes the customer loyalty training class and decides to quit anyway.
finds a shoe-related product that Zappos does not already carry.
creates a humorous theme for one of the monthly company meetings.
7. Building open and honest relationships with communication is an example of Zappos'

__________.
A.
profile for its target market
B. best practices being adapted from its new owner, Amazon.com
C.
ten core values for Zappos' culture
D.
qualities required of Zappos' suppliers
E.
qualities required of Zappos' retailers
8-2
8. Aggregating prospective buyers into groups that have common needs and will
respond similarly to a marketing action is referred to as
A.
B.
C.
D.
E.
consumer differentiation.
psychographics.
market segmentation.
market delineation.
aggregation marketing.
9. Market segmentation refers to
A. the philosophy that to do a truly excellent job of marketing, a company should

concentrate on only one customer segment at a time.
B. sorting prospective buyers into groups that are willing to pay more than the cost of
production for a good or service.
C. disaggregating prospective buyers from groups into segments of one (individuals)
and then creating specific products that will satisfy this person's unique needs.
D. aggregating prospective buyers into groups that have common needs and will
respond similarly to a marketing action.
E. the belief that it is possible to satisfy every customer's needs if you can identify
the correct segment within which they belong.
10. A basic test of the usefulness of the market segmentation process is whether it leads
to tangible marketing actions that can
A.
B.
C.
D.
E.
increase sales and profitability.

stand up to legal scrutiny.
be socially responsible.
create sustainable demand.
produce product differentiation.
11. Market segmentation involves aggregating prospective buyers into groups that
__________ and will respond similarly to a marketing action.
A.
B.
C.
D.
E.
respond similarly to marketing messages

have similar shopping styles
will become loyal customers
have common needs
will become stakeholders of the organization
8-3
12. Market segmentation involves aggregating prospective buyers into groups that have
common needs and will
A.
B.
C.
D.
E.
pay attention to marketing messages.

be responsive to marketing research.
use the same payment methods.
comply with the organization's core values.
13. Market segmentation stresses __________ and relating them to specific marketing
actions.
A.
aligning tasks to match competitor tactics
B.
grouping people according to similar needs
C. dividing people within a market randomly into equally sized groups
D. dividing people into the smallest groups possible
E. identifying potential new buyers who are not yet familiar with a new product
14. Small athletic shoe manufacturers such as Vans have targeted niche markets and
make shoes designed to satisfy the needs of different specific groups of customers.
This strategy is an example of
A.
B.
C.
D.
E.
mass customization.
customized manufacturing.
single chain marketing.
market specific selection.
15. New Balance makes the Minimus line of shoes with a Vibram outsole and REVlite
cushioning for those who want to "feel the trail." Its 1260v2 shoe incorporates
Stabilicore technology to "deliver a plush, smooth, and stable ride." And its Made in
America, top of the line, 990v3 traditional running/walking shoe uses a "premium
pigskin upper with mesh inserts for breathability, a stability-enhancing ABZORB
idsole, and ENCAP to promote a healthy gait." The strategy of appealing to different
types of customers in this way is an example of
A.
B.
C.
D.
E.
mass customization.
product definition.
8-4
16. Market segments refer to
A. the relatively heterogeneous groups of prospective buyers that result from the
market segmentation process.
B. all buyers of a product or service who have previously purchased a particular firm's
products or services and who intend to repeat that purchase sometime in the
future.
C. the smallest number of buyers that have similar needs but do not react similarly in
a buying situation.
D. the relatively homogenous groups of prospective buyers that result from the
E. all potential buyers of a product or service who intend to purchase a firm's
products or services but who have not yet done so.
17. A relatively homogenous group of prospective buyers that results from the market
segmentation process is referred to as a(n) __________.
A.
B.
C.
D.
E.
market segment
target market
customer base
ultimate consumer
preferred customer
18. To be identified as a market segment, members of the group must
A. be similar in terms of their consumption behavior.

B. represent a large share of the entire market and have buying power.
C. have diverse needs and have potential for future growth.
D. have diverse needs and be willing and able to purchase the product.
E. have the potential for future growth and increased profit or ROI.
19. The phrase "relatively homogeneous collections of prospective buyers" is most
descriptive of
A.
B.
C.
D.
E.
demographic clusters.
organizational buyers.
ultimate consumers.
market segments.
qualified prospects.
8-5
20. In marketing, each __________ consists of people who are relatively similar to each
other in terms of their consumption behavior.
A.
B.
C.
D.
E.
demographic cluster
organizational buyer group
market segment
ultimate consumer group
qualified prospect group
21. A marketing strategy that involves a firm using different marketing mix actions to
help consumers perceive the product as being different and better than competing
products is referred to as __________.
A.
B.
C.
D.
E.
market penetration
points of difference
market differentiation
product positioning
product differentiation
22. Product differentiation refers to
A. a good, service, or idea consisting of a bundle of tangible and intangible attributes

that satisfies consumers' needs.
B. the unique combination of product benefits received by targeted buyers.
C. those characteristics of a product that make it superior to competitive substitutes.
D. a marketing strategy that involves a firm using different marketing mix actions to
products.
E. the legal requirement that requires a specified degree of distinction between
products to ensure an organization's intellectual property rights.
23. Apple's iPhone has a feature known as Apple Pay that lets you use your phone to pay
for credit purchases, meaning you could leave your wallet at home. This feature sets
the smartphone apart from its competitors and is part of Apple's strategy for
A.
B.
C.
D.
E.
product segmentation.
market expansion.
product differentiation.
usage segmentation.
psychographic segmentation.
8-6
24. Recently Colgate-Palmolive introduced Colgate Enamel Health toothpaste, one that
claims to replenish and polish tooth enamel, the hard outer layer of the tooth that
provides a protective barrier to inner layers. This new formula helps to separate the
Colgate product from its top competitors, such as Crest. What marketing strategy did
Colgate-Palmolive use here?
A.
B.
C.
D.
E.
product segmentation
market expansion
usage segmentation
psychographic segmentation
25. Alka-Seltzer was made originally as a hangover remedy that cured the headache and
settled the stomach. Today, you can buy Original Alka-Seltzer, Extra Strength AlkaSeltzer, Alka-Seltzer Morning Relief (for morning headaches and fatigue), and AlkaSeltzer Heartburn Relief. Each Alka-Seltzer product has a unique formulation to
relieve a specific malady that makes them more specialized than competing
products. The maker of Alka-Seltzer is using
A.
B.
C.
D.
E.
product variation.
market sectioning.
product base development.
26. The process of segmenting a market and selecting specific segments as targets is the
link between __________ and the organization's marketing program.
A.
B.
C.
D.
E.
self-regulatory industry standards

government regulations
top-level management
buyers' or market needs
controllable environmental factors
27. The process of segmenting a market and selecting specific segments as targets is the
link between the various buyers' or market needs and
A.
B.
C.
D.
E.
industry standards.
government regulations.
top-level management.
controllable environmental factors.
the organization's marketing program.
8-7
Figure 8-1
28. In Figure 8-1 above, Box A represents which stage of the market segmentation
process?
A.
B.
C.
D.
E.
link needs to actions

identify market needs
establish a marketing protocol
execute marketing program actions
segment and select the target markets
29. In Figure 8-1 above, B represents which stage of the market segmentation process?
A.
B.
C.
D.
E.

30. In Figure 8-1 above, C represents which stage of the market segmentation process?
A.
B.
C.
D.
E.

8-8
31. Zappos' original target market customers consisted of people who wanted all of the
following EXCEPT:
A.
B.
C.
D.
E.
to receive quick delivery of their merchandise.

to buy sustainable shoes, accessories, and clothing.
to shop online in the convenience of their own homes.
to allow for free returns of goods if dissatisfied.
to have a wide selection of shoes.
32. A framework to relate the market segments of potential buyers to products offered or
potential marketing actions by an organization is referred to as a __________.
A.
B.
C.
D.
E.
payoff table
cross-tabulation
market-product grid
growth-share matrix
product differentiation table
33. A market-product grid refers to
A. a visual representation of all products offered within a specific product class.

B. a framework used to compare the relative market share of one firm's product
offerings to those of its competitors.
C. a technique that seeks opportunities by finding the optimum balance between
marketing efficiencies versus R&D-manufacturing efficiencies.
D. a framework used to relate the market segments of potential buyers to products
offered or potential marketing actions by an organization.
E. a technique that helps a firm search for growth opportunities from among current
and new markets as well as current and new products.
34. A market-product grid is a framework to relate
A. total estimated expenses for each product sold to each market segment.
B. total anticipated revenue for each product-market segment combination.
C. total anticipated profit for each product sold to each market segment.
D. the market segments of potential buyers to relative market share compared to the
largest competitor.
E. the market segments of potential buyers to products offered or potential marketing
actions by an organization.
8-9
35. A market-product grid is a framework to relate the __________ to products offered or

potential marketing actions by an organization.
A.
B.
C.
D.
E.
market segments of potential buyers

marketing objectives of potential products
total anticipated revenue
total anticipated profit
market share of the closest competitor
36. A market-product grid is a framework to relate the market segments of potential

buyers to
A.
estimated expenses for products sold.
B. products offered or potential marketing actions by an organization.
C.
total anticipated revenue.
D.
total anticipated profit.
E.
market share of the closest competitor.
37. To create a market-product grid for bed pillows, the most effective way to segment
the market would be using
A. the age of the sleeper: less than 18 years of age, 18 to 44 years of age, or 45
years and older.
B. the sleeper's annual income: less than $25,000, $25,000 to $49,999, or $50,000
and over.
C.
the sleeper's gender: male or female.
D.
the time of sleep: day or night.
E. how the sleeper sleeps: side, back, or stomach.
38. An analysis of the pillow market using a market-product grid suggests that the most
important segment to target is
A.
B.
C.
D.
E.
side sleepers.
sleepers with sleep disorders, such as sleep apnea.
sleepers with annual incomes of $50,000 and over.
back sleepers.
stomach sleepers.
8-10
Figure 8-2
39. Consider Figure 8-2 above. My Pillow uses infomercials and product demonstrations
at events such as state fairs to market its line of pillows that are guaranteed to be
"the most comfortable pillow you'll ever own!" Based on the market research above,
which market-product combination should My Pillow target?
A.
B.
C.
D.
E.
stomach sleeper-firm pillow

back sleeper-medium pillow
side sleeper-firm pillow
stomach sleeper-soft pillow
side sleeper-soft pillow
40. The purpose of market segmentation is to respond more effectively to the wants of
groups of potential buyers in order to
A.
B.
C.
D.
E.
maintain market share.

increase sales and profits.
assume social responsibility.
use the firm's resources most efficiently.
provide the best quality products on the market.
8-11
41. Which of the following statements regarding when and how to segment markets is
most accurate?
A. Even if a firm finds only one potential market segment, it should take advantage of
the method to appear cutting-edge to its competitors and customers.
B. Market segmentation only works for large corporations; small businesses don't
have the resources to engage in the process.
C. Governments should not attempt market segmentation because the strategy is
only applicable for consumer and organizational markets.
D. If a business firm goes to the trouble and expense of segmenting its markets, it
expects to increase its sales, profits, and return on investment.
E. Market segmentation strategies work less than 10 percent of the time.
42. When expenses are greater than the potential increased sales from market
segmentation, a firm should
A. not consider market segmentation at this time.

B. combine departments within the company to make the process more streamlined.
C. reduce production costs or increase prices to facilitate the segmentation process.
D. seek alternate channels of distribution, including Internet sales.
E. discontinue manufacturing any products that are not in the mature stage of their
product life cycle.
43. All of the following are market segmentation strategies EXCEPT:
A.
B.
C.
D.
E.
build-to-order.
multiple products, multiple market segments.
one product, multiple market segments.
multiple products, one segment.
mass customization.
44. When a firm produces only a single product or service and attempts to sell it to two
or more market segments, it avoids __________.
A. the extra cost of developing and producing additional versions of the product
B.
creating a customer service gap
C.
indirect distribution and logistics problems
D.
restructuring the firm's strategic planning
E.
amortization costs of product enhancements
8-12
45. When compared to a multiple products, multiple market segments strategy, a one
product, multiple market segment strategy
A. is a much more effective means of meeting consumers' individual needs.

B.
creates greater savings in production costs.
C. is a more effective way of meeting organizational objectives.
D.
has significantly higher distribution costs.
E. is more profitable since a firm can charge the new segments higher prices without
changing the product.
46. One marketing action that can be taken to sell a single product or service to multiple
market segments is to
A. develop and produce another version of the product.

B. manufacture products that appeal to different markets.
C.
develop separate promotional campaigns.
D. purchase another firm that has additional products that would appeal to multiple
markets.
E. issue stock to fund additional research and development for new products.
47. The annual Sporting News Baseball Yearbook had exactly the same stories but with
17 different covers to appeal to baseball fans in 17 different regions of the U.S. What
is the basis of its market segmentation strategy?
A.
B.
C.
D.
E.
retail outlet segmentation
demographic segmentation
behavioral segmentation
geographic segmentation
8-13
Harry Potter books Photo

48. In the United States, the Harry Potter series of books were often at the top of The
New York Times fiction bestseller list. These books have been marketed by turns to
preteen, teen, and adult readers around the world with creative marketing, including
different book covers. Scholastic Press, the publisher of the Harry Potter books in the
U.S., is using which of the following segmentation strategies?
A.
B.
C.
D.
E.
multiple products with one segment

one product with one channel of distribution
one product with multiple market segments
one product with changes based on customer behavior
multiple products with multiple segments
49. Which of the following is a disadvantage of employing a multiple products, multiple

market segments strategy if NOT implemented well?
A.
higher sales but lower profits
B.
reduced quality and higher prices
C. meeting customer needs but at the expense of higher prices
D.
lower prices but with higher production costs
E.
higher quality but lower prices
8-14
50. Which of the following is an example of a multiple products and multiple market
segments strategy?
A. College Football magazine selects different covers for essentially the same written
content in order to appeal to different geographic markets in the U.S.
B. A new movie used several different movie trailers. One set of previews showed the
action scenes in order to attract one audience and the other set showed romantic
scenes to attract another audience.
C. Ford manufactures SUVs for those who wish to carry lots of people and pickup
trucks for those who wish to carry lots of cargo.
D. Arm and Hammer Baking Soda can be used for baking and to remove odors from
refrigerators and cat litter boxes.
E. Johnson's Baby Oil is advertised as a skin softener for babies and as a makeup
remover for women.
51. Which of the following is an example of a multiple products and multiple market
segments strategy?
A. College Football magazine selects different covers for essentially the same
magazine in order to appeal to different geographic markets in the U.S.
B. A new movie used several different movie trailers. One set of previews showed the
action scenes in order to attract one audience and the other set showed romantic
scenes to attract another audience.
C. Arm and Hammer Baking Soda can be used for baking and to remove odors from
refrigerators and litter boxes.
D. Betty Crocker carries one line of cake mixes for people with conventional ovens
and another line of cake mixes for people with microwave ovens.
remover for women.
52. Kellogg's has several cereals targeted at different types of users. This is an example
of multiple products aimed at multiple markets. Manufacturing these different cereals
is clearly more expensive than producing only one but seems worthwhile if it adds to
the manufacturer's sales revenues and profits, doesn't reduce quality or increase
price, and
A.
conforms to all FDA guidelines.
B. uses the same promotion and packaging for all segments.
C.
decreases the cost of the physical plant.
D.
stabilizes competition.
E.
better serves customers' needs.
8-15
is clearly more expensive than producing one, but seems worthwhile if it adds to the
manufacturer's sales revenues and profits, serves customers' needs better, and
A.
B.
C.
D.
E.

creates economy of scale.
doesn't reduce quality or increase price.
stabilizes the sales revenues and profits.
is clearly more expensive than producing one, but seems worthwhile if it serves
customers' needs better, doesn't reduce quality or increase price, and
A.
B.
C.
D.
E.

adds to the manufacturer's sales revenues and profits.
55. Tailoring products or services to the tastes of individual customers on a high-volume

scale is referred to as
A.
B.
C.
D.
E.
family branding.
mass customization.
economies of scale marketing.
build-to-order.
56. Custom Foot operates six retail locations. At first glance, none looks different from a
typical boot store. But here the only boots on hand are display models, there is no
inventory for sale and customers go home empty-handed, awaiting their orders.
Customers browse the store, choosing style, color, and leather type, with about 100
displays to provide style guidelines. Custom Foot guarantees your boots will be ready
within three weeks. This is an example of
A.
B.
C.
D.
E.
mass customization.
specialty customization.
virtual merchandising.
one product and multiple market segments.
multiple products and multiple market segments.
8-16
57. ChoiceShirts is an online company that makes made-to-order T-shirts. Its online
customers can order their shirts using any downloaded photo inserted into 600
templates or even design a shirt from scratch. This is an example of
A.
B.
C.
D.
E.
family branding.
mass customization.
58. MyTwinn makes dolls that look like young girls. For $119, the firm will make a doll that
looks just like a photograph. So, if you send in the money and a photo of your young
niece, she could have a doll that is her twin! This is an example of
A.
B.
C.
D.
E.
family branding.
production marketing.
mass customization.
59. Lands' End will custom fit a Marinac jacket and make it with additional features such
as thumb loops, underarm ventilation slits, and a key clip when you order from
LandsEnd.com. This is an example of
A.
B.
C.
D.
E.
family branding.
mass customization.
"Tiffany/Walmart" marketing.
market melding.
60. Nike employs a __________ strategy at its website, nikeid.com, which allows customers
design a sneaker to their own personal specifications.
A.
B.
C.
D.
E.
product sampling
product clustering
mass customization
usage segmentation
8-17
61. Chip-N-Dough Cookie Company will let you select cookies and put a photo of yourself
on the tin. This is an example of
A.
B.
C.
D.
E.
mass customization.
multiple marketing.
target marketing.
product clustering.
repositioning.
62. Name Maker is an online company that sells high-end gift wrapping that can have
custom slogans or names printed on it, such as the name of a person celebrating a
birthday or a couple who is getting married. This made-to-order gift-wrapping is
priced from $24.95 to $32.95 per 12-foot roll. This is an example of
A.
B.
C.
D.
E.
family branding.
mass customization.
synergistic marketing.
63. Manufacturing a product only when there is an order from a customer is referred to
as
A.
B.
C.
D.
E.
order customization.
a one product one market segment strategy.
build-to-order.
64. Model E is a new type of car manufacturer that relies on the Internet ordering. "Think
of Model E as the Dell of the auto industry. We design just a few products that
consumers truly want, leveraging best-in-class components and micro-factory
approaches for rapid design, launch, and direct delivery," said William Santana Li,
president and CEO of Model E. Model E manufactures each car when a customer
chooses from a limited number of options and orders. Model E relies on
A.
B.
C.
D.
E.
build-to-order.
mass customization.
8-18
65. Organizational synergy is the increased customer value achieved through
A. performing organizational functions more efficiently.

B. more discounts or larger rebates at the point of sale.
C. involvement of the ultimate consumer in product design.
D.
an increase in the knowledge of competitors.
E. shared ownership of the organization through publicly traded stock.
66. The increased customer value achieved through performing organizational functions
like marketing or manufacturing more efficiently is referred to as __________.
A.
B.
C.
D.
E.
aggregation
organizational synergy
segmentation
amalgamation
valuation
67. The ultimate criterion for an organization's marketing success is that __________ as a
result of increased synergies.
A.
B.
C.
D.
E.
costs decrease
market share increases
product deficiencies decrease
customers should be better off
new products flourish
68. All of the following are examples of increased customer value from organizational
synergy EXCEPT:
A.
B.
C.
D.
E.
lower prices
increased brand awareness
more products
improved distribution
improved quality of existing products
69. When a new product or a new retail chain steals customers and sales from older
existing ones of an organization, it is referred to as
A.
B.
C.
D.
E.
cannibalization.
amortization.
product appropriation.
product pilfering.
marketing Darwinism.
8-19
70. When Ann Taylor, a well-known retailer of sophisticated women's clothing, started
losing sales to its own LOFT outlets that feature moderately priced casual clothes,
Ann Taylor was dealing with the marketing phenomenon known as __________.
A.
B.
C.
D.
E.
amortization
guerrilla marketing
shrinkage
marketing Darwinism
cannibalization
71. Suppose marketers want to use product differentiation and market segmentation
strategies. What question should they ask when considering the potential for
cannibalization with these strategies?
A.
B.
C.
D.
"Will our new products steal customers or sales from our older ones?"
"Will the products compete head-to-head with those of a competitor?"
"Can this action successfully draw customers away from competitors?"
"Are there enough similarities within the market segment to warrant such high
costs?"
E. "Will this action eliminate the need for individualized advertising and promotion?"
72. Cannibalization would mostly likely occur if
A. Dell adds high-end speaker systems to its line.

B. General Mills launches Caramel Crunch Cheerios.
C. General Motors markets a motorcycle similar to the Can-Am Spyder Roadster 3wheel bike.
D. Pillsbury adds boxed sugar to its product mix.
E. Procter & Gamble adds a new line of baby clothing to its Pamper's stable of
products.
73. Today, marketers are increasingly emphasizing a Tiffany/Walmart strategy, which is to
offer
A.
B.
C.
D.
E.
a low-priced product to a high-income or high net worth segment.

a high-priced product to a low-income or low net worth segment.
different variations of the same basic offering to high-end and low-end segments.
a high-priced and a low-priced offering to a single market segment.
different offerings to high-end and low-end segments.
8-20
74. Which of the following is an example of a Tiffany/Walmart strategy?
B. A new movie used several different movie trailers; one showed the action scenes in
order to attract one audience and the other showed romantic scenes to attract
another audience.
C. Arm and Hammer Baking Soda can be used for baking and to remove odors from
refrigerators and litter boxes.
D. Gap's Banana Republic chain sells blue jeans for $58, whereas its Old Navy stores
sell a slightly different version for $22.
remover for women.
75. The Walt Disney Company carefully markets two distinct Winnie-the-Poohs; one is the
original line-drawn figure on fine china sold at Nordstrom and the other is a cartoonlike Pooh on polyester bed sheets sold at Target. This is an example of
A.
B.
C.
D.
E.
mass customization.
a Tiffany/Walmart strategy.
price discrimination.
psychographic market segmentation.
76. You can go to your nearest Hallmark card store and buy a birthday greeting card for a
friend and pay $4.50. Or, you can buy a Hallmark card from its new $0.99 line of
greeting cards, made with lesser-quality materials but just as sentimental, that are
sold at Barnes and Noble bookstores. This is an example of
A.
B.
C.
D.
E.
mass customization.
organizational synergy.
77. The purpose of the five key steps in segmenting and targeting markets is to
A. identify competitors that provide similar products that satisfy a firm's customers'
needs.
B. provide guidance to reposition a firm's products.
C. generate new products ideas for firms that are not growing in market share.
D. link market needs of customers to the organization's marketing program.
E. correlate directly to each of the five environmental forces.
8-21
78. The first step in segmenting and targeting markets that links customer needs to
marketing actions is to
A.
group potential buyers into segments.
B.
group products to be sold into categories.
C. develop a market-product grid and estimate size of the overall market.
D.
select target markets.
E. take marketing actions to reach target markets.
79. The second step in segmenting and targeting markets that link customer needs to
A.
B. develop a market-product grid and estimate size of the overall market.
C.
D. take marketing actions to reach target markets.
E.
80. The third step in segmenting and targeting markets that link customer needs to
marketing actions is to __________.
A.
group potential buyers into segments
B.
group products to be sold into categories
C.
select target markets
D. develop a market-product grid and estimate size of markets
E. take marketing actions to reach target markets
81. The fourth step in segmenting and targeting markets that link customer needs to
A.
B.
C.
D. develop a market-product grid and estimate size of the overall market
E. take marketing actions to reach target markets
8-22
82. The fifth step in segmenting and targeting markets that link customer needs to
A. take marketing actions to reach target markets

B.
C.
D.
E. develop a market-product grid and estimate size of the overall market
83. There are five steps involved in segmenting and targeting markets. What should a
marketer do after he or she has grouped products to be sold into categories?
A.
create product groupings
B.
C.
take marketing actions to reach target markets
D. develop a market-product grid and estimate size of markets
E. form prospective buyers into market segments
84. A marketing manager goes through several steps to put a market segmentation plan
into effect. This includes being able to form market segments and then __________
without encountering excessive costs.
A.
B.
C.
D.
E.
eliminate potential non-buyers

identify segmentation variables
select the market segment(s) to target
redirect their purchase behaviors
ignore any and all similarities
85. All of the following are criteria used for forming market segments EXCEPT:
A. difference of needs of buyers among segments.

B.
potential for increased profit.
C.
cost of reaching the segment.
D. potential of a marketing action to reach a segment.
E. simplicity and cost-effectiveness of assigning potential buyers to segments.
86. Which of the following is a criterion used in forming market segments?
A. similarity of segments to competitors' segments

B. differences between potential suppliers or distributors
C. differences of needs of buyers within a segment
D.
market size of the segment
E. simplicity and cost-effectiveness of assigning potential buyers to segments
8-23
87. The best segmentation approach is the one that
A.
makes it easiest to reach the segment.
B. maximizes the opportunity for future profit and ROI.
C. recognizes different needs of buyers among different segments.
D. recognizes similarities of needs of potential buyers within a segment.
E. is simplest and least costly in assigning potential buyers to segments.
88. Which of the following is NOT a reason to segment a market?
A. The ability to assign buyers to a segment is simple and cost-effective.

B. It would cause an increase in market share or profit.
C. All the buyers in the entire market have similar wants and needs.
D. There is a potential marketing action to reach it.
E. There are different wants and needs of buyers in the entire market.
89. Which of the following is NOT a criterion to use in forming market segments?
A.
B.
C.
D.
E.
The ability to assign buyers to a segment is cost-effective and simple.

The result of segmenting will cause an increase in market share or profit.
There are significant similarities among buyers in the market segment.
There is a potential marketing action to reach the segment.
The cost to reach the segment exceeds its profitability.
90. Selling a product to a different market segment usually requires a different marketing
action that in turn means greater costs. If increased revenues don't offset extra costs
of this action, a marketer should __________.
A.
B.
C.
D.
E.
increase the advertising budget

prune the product offerings
family brand their products
combine segments
group products into categories
91. Criteria for forming segments involve both similarities and differences. In terms of the
needs of buyers, the similarities must be __________ a segment, and the differences
must be __________ segments.
A.
B.
C.
D.
E.
between; among
throughout; absent in
within; among
absent in; throughout
among; across
8-24
92. Criteria for forming segments involve both similarities and differences. Which of the
following statements is most accurate?
A. Within a segment, the needs of potential buyers should be different; among

segments, the needs of buyers should be similar.
B. Within a segment, the needs of potential buyers should be similar; among
segments, the needs of buyers should be different.
C. The needs of buyers should be different, both between segments and within
segments.
D. The needs of buyers should be the same, both between segments and within
segments.
E. If there are any differences at all, you should forgo any segmentation.
93. Grouping potential buyers into meaningful segments involves meeting some specific
criteria that answer the following question:
A.
"Is this product useful on a global scale?"
B.
"Is it possible to reposition this product?"
C. "Is there too much competition for this product?"
D.
"Is the market loyal to the product?"
E. "Would segmentation be worth doing and is it possible?"
94. About 3 percent of the population has some degree of allergic reaction, usually mild,
to preservatives used in salad bars. Restaurants might consider people with these
allergies as a separate segment. To implement this segmentation strategy,
restaurants would have to prepare a regular salad bar and a special salad bar for the
allergies segment. This multiple product and multiple market segment strategy would
have the greatest difficulty meeting which of the following criteria used to form
market segments?
A. different needs of buyers among different segments

B. similarity of needs of potential buyers within a segment
C. simplicity and cost-effectiveness of assigning potential buyers to segments
D.
potential for increased profit and ROI
E. potential of a marketing action to reach a segment
95. Four general categories used to segment consumer markets are geographic
segmentation, demographic segmentation, __________, and behavioral segmentation.
A.
B.
C.
D.
E.
supplier segmentation
demand segmentation
regional segmentation
8-25
96. Segmentation based on where prospective customers live or work is referred to as
A.
B.
C.
D.
E.
zip code segmentation.

geographic segmentation.
regional segmentation.
MSA segmentation.
NAICS code segmentation.
97. Region and city size are both variables used to employ __________ segmentation.
A.
B.
C.
D.
E.
geographic
behavioral
district
psychographic
demographic
98. Campbell's Soup Company found that its canned nacho cheese sauce, which could be
heated and poured directly onto nacho chips, was too spicy for Americans in the East
and not spicy enough for those in the West and Southwest. Today, Campbell's plants
in Texas and California produce a spicier nacho cheese sauce than what is produced
in the other plants. Campbell's is using __________ segmentation.
A.
B.
C.
D.
E.
demographic
behavioral
economic
geographic
psychographic
99. Which of the following statements best illustrates geographic segmentation?
A. GE builds a downsized microwave oven to hang under kitchen cabinets.

B. Del Monte offers a line of canned fruit with no added sugar or artificial sweeteners.
C. In China, KFC sells a spicier chicken the farther away its restaurants are from the
coastal areas.
D. A fast food hamburger restaurant is only open for breakfast on weekdays and
Saturdays but not Sundays.
E. A gourmet grocer advertises its services on a small-audience classical music
station even though there is a much larger-audience rock station in the area.
8-26
100 Universal Concerts wants to bring a series of music concerts to Canada next year. In
.
general, Western Canadians prefer country music while Eastern Canadians prefer
rock. In fact, a country music event in eastern Canada is very likely to have lots of
empty seats. To maximize revenue, Universal Concerts should segment its Canadian
market according to __________.
A.
B.
C.
D.
E.
geographic characteristics
demographic characteristics
music format characteristics
behavioral characteristics
psychographic characteristics
101 Variables that are based on some objective physical (gender, ethnicity), measurable
.
(age, income), or other classification attribute (occupation) of prospective customers
are used in which segmentation base?
A.
B.
C.
D.
E.
personality
usage
needs
demographic
behavioral
102 Which of the following is a consumer demographic segmentation variable?

.
A.
B.
C.
D.
E.
personality
gender
usage rate
needs
region
103 More than half of all U.S. households are composed of only one or two persons, so
.
Aunt Jemima offers one serving meals - such as its Ham & Egg Scramble and
Oatmeal Pancakes. Aunt Jemima is using __________ as the basis to segment its
market.
A.
B.
C.
D.
E.
usage rates
usage patterns
behavior characteristics
8-27
104 Procter & Gamble (P&G) decided to skip a generation of consumers when it began to
.
market Old Spice deodorant. The target market consists of men aged 18 to 34 years
old (Generation Y) who don't remember the Old Spice brand sold to their
grandfathers (pre baby boomer) many years ago. P&G is using which type of
segmentation variable?
A.
B.
C.
D.
E.
behavioral
demographic
lifestyle
geographic
psychographic
105 When a telemarketer calls to sell a consumer life insurance, the last questions asked
.
is what category does the person's household income falls into (less than $50,000;
$50,000 to $99,999; and $100,000 and over). When the telemarketer asks about
household income, this indicates the use of which type of consumer variable the firm
is using to segment its market?
A.
B.
C.
D.
E.
usage
behavior
demographic
buying situation
psychographic
106 The State of Alabama Board of Tourism ran a series of ads showing traditional
.
families enjoying various attractions in the state. Since the apparent target of these
ads is the traditional family, it appears that the State of Alabama Board of Tourism
has segmented the market using __________ variables.
A.
B.
C.
D.
E.
demographic
regional
socioeconomic
geographic
psychographic
8-28
107 Which of the following statements demonstrate the formation of a segment based on
.
household size?
A. Campbell's makes a spicier nacho cheese sauce for its distributors in Texas than it
does in Maine.
B. GE built a downsized microwave oven to hang under kitchen cabinets.
C. Del Monte offers a line of canned fruit with no added sugar or artificial
sweeteners.
D. A fast-food hamburger restaurant is only open for breakfast on weekdays and
108 At a Hallmark store you can find several lines of greeting cards, including Fresh Ink,
.
Nature's Sketchbook, Shoebox, Maxine, Mahogany, and Tree of Life cards - all made
by Hallmark for sale in its stores and intended to appeal to different target markets.
The Mahogany line is designed to appeal to African-Americans. This is an example of
__________ segmentation.
A.
B.
C.
D.
E.
regional
lifestyle
demographic
geographic
psychographic
109 Which of the following statements regarding segmentation bases is most accurate?
.
A. The identification of demographic variables is more objective than the
identification of psychographic variables, which is more subjective.
B. Marketers should use segmentation bases in this order to reduce potential costs:
behavioral, demographic, psychographic, and geographic.
C. The identification of psychographic variables is more objective than the
identification of demographic variables, which is more subjective.
D. Behavioral segmentation is based primarily on personality.
E. Psychographic segmentation is based primarily on product features.
110 Segmentation based on some subjective mental or emotional attributes, aspirations,
.
or needs of prospective customers is referred to as
A.
B.
C.
D.
E.
behavioral segmentation.
affective segmentation.
socioeconomic segmentation.
psychosocial segmentation.
8-29
111 All of the following are psychographic segmentation variables EXCEPT:

.
A.
B.
C.
D.
E.
lifestyle
needs
birth era
PRIZM
personality
112 Personality and lifestyle are both variables used to employ __________ segmentation.
.
A.
B.
C.
D.
E.
geographic
behavioral
attitudinal
psychographic
demographic
113 Magazines like Fitness, Field & Stream, Golf Digest, and Health focus on how people
.
live their lives, and thus all use a __________ segmentation strategy.
A.
B.
C.
D.
E.
psychographic
behavioral
situational
socioeconomic
geographic
114 The Nielsen PRIZM lifestyle segmentation is based on the belief that "birds of a
.
feather flock together." This type of consumer segmentation is referred to as
A.
B.
C.
D.
E.
situational segmentation.
115 Nielsen PRIZM segmentation classifies every household into one of 66

.
demographically and __________ distinct neighborhood segments to identify lifestyles
and purchase behavior within a defined geographic market area, such as zip code.
A.
B.
C.
D.
E.
financially
behaviorally
ethnically
socially
ethnographically
8-30
116 Segmentation based on some observable actions or attitudes by prospective

.
customers, such as what benefits they seek, as well as where, how frequently, and
why they buy, is referred to as
A.
B.
C.
D.
E.
demographic segmentation.
117 Segmentation based on what product features are important to different customers is
.
known as
A.
B.
C.
D.
E.
118 Product features and usage rate are both variables used to employ __________
.
segmentation.
A.
B.
C.
D.
E.
geographic
demographic
loyalty
psychographic
behavioral
119 Behavioral segmentation may be based on

.
A.
B.
C.
D.
E.
lifestyles and demographics.

retailer and wholesaler behaviors.
geographic and demographic criteria.
product features and retail store type.
demand and supply.
8-31
120 A national car rental firm targets 50 percent of its advertising to salespeople who
.
rent a car over 40 weeks per year. The company is using __________ segmentation.
A.
B.
C.
D.
E.
geographic
demographic
loyalty
psychographic
behavioral
121 College dorm residents frequently want to keep and prepare their own food and
.
snacks to save money or have a late night snack. However, their dorm rooms are
often woefully short of space. MicroFridge marketers understand this and offer a
combination microwave, refrigerator, and freezer targeted to these students.
MicroFridge is most likely using which basis of segmentation?
A.
B.
C.
D.
E.
sociocultural segmentation
socioeconomic segmentation
122 Samsung sells a variety of TVs, from simple and small ones to large smart TVs with
.
Internet connectivity and 3D technology. Customers prefer different features, so
Samsung uses which type of segmentation variable based on their viewing
preferences?
A.
B.
C.
D.
E.
123 Potluck participants bring a variety of dishes to share with family, friends, or
.
coworkers at these events, but it is easy to forget to take the bowl that you brought
home with you. Reynolds responded to this problem by creating PotLux cookware,
attractive and inexpensive disposable dishes for transporting food. Reynolds is using
__________ segmentation here.
A.
B.
C.
D.
E.
psychographic
behavioral
demographic
social
geographic
8-32
124 Many companies have cut travel budgets so that very few business people are
.
authorized to fly first class. Despite the shrinking pool of business-class travelers,
British Airways has grown market share for its transatlantic business class by offering
greater comfort. Promotions to frequent fliers stress that passengers can sleep in
fully reclining seats and arrive refreshed to carry out a full day's schedule. The
segmentation strategy of British Airways is an example of
A.
B.
C.
D.
E.
life stage segmentation.

lifestyle segmentation.
social class segmentation.
125 ExxonMobil targets consumers that fill up their gas tanks more than once a week
.
with its Chase Visa fuel card. In this example, ExxonMobil is using which
A.
B.
C.
D.
E.
needs
lifestyle
behavioral
psychographic
demographic
126 The quantity consumed or patronage (store visits) during a specific period is referred
.
to as
A.
B.
C.
D.
E.
usage rate.
purchase metric.
consumption index.
consumption rate.
demand amount.
127 Usage rate refers to

.
A. the percentage of total possible users divided by the total number of consumers
who actually use a product or service.
B. the number of times a customer uses or recommends a product or service
annually.
C. quantity consumed or patronage (store visits) during a specific period.
D. the maximum number of times a customer has used a product or service
historically.
E. the profits a firm earns from customers who consume a particular product or
service.
8-33
128 Alamo, a car rental firm, targets 50 percent of its advertising to salespeople who rent
.
a car over 40 weeks per year. Alamo likely segments its market by
A.
B.
C.
D.
E.
usage rate.
benefits offered.
demographics.
geography.
lifestyle.
129 Frequency marketing is a strategy that focuses on

.
A.
B.
C.
D.
E.
demographics.
benefits offered.
usage rate.
geography.
lifestyle.
130 The market segmentation strategy known as frequency marketing focuses on

.
A.
trial.
B. the average number of times a person in the target audience is exposed to an
advertisement.
C.
consumption preferences.
D.
turnover.
E.
usage rate.
131 Airlines have developed frequent-flier programs to encourage passengers to use the
.
same airline repeatedly. This marketing strategy is based on
A.
B.
C.
D.
E.
buying condition segmentation.
132 Airline programs that encourage passengers to repeatedly use the same airline focus
.
on usage rate and employ a __________ strategy.
A.
B.
C.
D.
E.
rate of recurrence
product utilization
incidence
frequency marketing
consumption index
8-34
133 A recent study by the Aberdeen Group analyzed which segmentation bases were
.
used by the 20 percent most profitable organizations of the 220 surveyed. Which
segmentation base did these organizations use the most?
A.
B.
C.
D.
E.
behavioral
psychographic
geographic
demographic
product
134 The 80/20 rule suggests that

.
A. 80 percent of a firm's inventory should be readily available while 20 percent
should be reserved for emergency demand.
B. 80 percent of a firm's first-time users will become brand loyal while 20 percent will
use the product only once and then abandon it.
C. 80 percent of a firm's sales are obtained from 20 percent of its customers.
D. 80 percent of a firm's marketing program expenses are tax deductible while 20
percent are not.
E. 80 percent of a firm's products will be sold to ultimate consumers while 20 percent
to organizational buyers.
135 The 80/20 rule is most closely related to which basis of segmentation?
.
A.
B.
C.
D.
E.
geographic
psychographic
opportunistic
demographic
behavioral
136 Todd Harris and Associates, a New York sales promotion agency, discovered from an
.
analysis of its files that one-quarter (or 25 percent) of its clients generated more than
three-quarters (or 75 percent) of its fees and commissions. This is an example of
what classic concept?
A.
B.
C.
D.
E.
the two quarter gap

the 80/20 rule
the law of usage
the 75/25 exchange
Paul's Law
8-35
Figure 8-4
137 To the owner of a Wendy's fast food restaurant, the information in Figure 8-4 above
.
suggests that Wendy's prospects are __________ of the total compared to __________
for McDonald's.
A.
B.
C.
D.
E.
57.0 percent, 51.0 percent

138 For an owner of a Wendy's fast-food restaurant, the information in Figure 8-4 above
.
suggests
A. Wendy's has an advantage over both McDonald's and Burger King as being the
most preferred "second choice" restaurant.
B. most of the respondents think of Wendy's as their primary fast food restaurant.
C. a need to devise a marketing program to win customers from McDonald's and
Burger King.
D. McDonald's has fewer "exclusively loyal" customers than does Wendy's.
E. Burger King is closing in on your market share.
8-36
139 To the owner of a Wendy's fast-food restaurant, the information in Figure 8-4 above
.
suggests
A. new menu items or promotional strategies may be needed to convert prospects

into users.
C. McDonald's has fewer "exclusively loyal" customers than does Wendy's.
D. Burger King is closing in on your market share.
E. a need to devise a marketing program to change the minds of nonprospects.
140 As an owner of a Wendy's fast-food restaurant located near a large urban university,
.
you need to analyze your customers and determine which segmentation base and its
associated variable(s) you will use to segment your target market. Which
segmentation base and associated variable (s) should you use?
A.
psychographic: VALS and personality
B.
demographic: gender and age
C.
behavioral: students and nonstudents
D.
geographic: city size and zip code
E. transportation mode: car, bike, public transportation, and none (walking)
141 Which of the following is a basis used to segment U.S. organizational markets?
.
A.
B.
C.
D.
E.
geographic
psychographic
income
prospects
education
142 Variables such as location, the North American Industry Classification System (NAICS)
.
code, and number of employees are all examples of ways to
A.
B.
C.
D.
E.
differentiate products.
forecast sales to a consumer market.
segment an organizational market.
promote NAFTA.
segment a consumer market.
8-37
143 Which of the following statements about market segmentation for organizational
.
markets is most accurate?
A. Criteria for segmenting markets are the same whether the market is composed of
consumers or organizations.
B. Both consumer markets and organizational markets use demographic, geographic,
and behavioral bases to segment markets.
C. Psychographic criteria are just as important in segmenting organizational markets
as they are in segmenting consumer markets.
D. Consumer markets use market segmentation criteria while organizational markets
do not.
E. The greatest difference in market segmentation strategies between consumer and
organizational markets is the number of employees employed in the segmentation
process.
144 Evergreen Air Center in Marana, Arizona, is the world's biggest parking lot for
.
unwanted commercial aircraft. Airlines pay from $750 to $5,000 a month for its
storage service. The warm, dry air where the operation is located serves as a cheap
and effective airplane preservative. Which segmentation variable might Evergreen
use to segment the market?
A. NAICS sector, such as manufacturers, or retailers, or lawyers

B.
number of locations
C. who buys, such as individual buyer or buying groups
D.
metropolitan statistical area
E.
number of employees
145 The William Morris Agency represents country singer Trace Adkins in negotiations
.
with various venues in which he could perform. Imagine that the agency decided the
singer would not perform at venues located in small town communities that have less
than 100,000 people. Thus, the agency is using __________ segmentation.
A.
B.
C.
D.
E.
entertainment
psychographic
geographic
usage rate
behavioral
8-38
146 Australia-based Renewable Energy Ltd. sells a $10 million device that converts
.
manure into energy. One of these devices is capable of generating energy equal to
$2 million of natural gas per year. The company believes its target market consists of
businesses similar to its first customer, a fertilizer manufacturer that was located in a
rural area. If the firm expands to the United States, it most likely will use which of the
following strategies to segment its market?
A.
B.
C.
D.
E.
behavioral and geographic

number of employees and behavioral
purchase location and purchase type
NAICS code and geographic
behavioral and NAICS code
147 If Wendy's customers are buying an eating experience, which of the following
.
rationales would make the most sense if you were to group the products Wendy's
sells?
A.
B.
C.
D.
E.
grouping by caloric intake

grouping by price
grouping by meal occasion
grouping by usage rate
grouping by level of uniqueness
148 Grocery retailer Safeway displays the thousands of items it sells in aisles containing
.
related items or product groupings. Examples would be the pet food aisle or the soft
drink aisle. Why would Safeway display and sell product groupings in this manner?
A. The groupings increase the number of market-product combinations on the

market-product grid, which makes it a more manageable framework for
subsequent analysis.
B. This form of product groupings makes it easier for customers to get in and out of
the store more quickly, creating time utility.
C. The products are grouped so people can relate to them in a more meaningful way
when they shop.
D. Product groupings can be generated quantitatively to show which adhere to the
80/20 rule.
E. Suppliers get preferential treatment based upon the number of different UPCs they
provide.
8-39
149 Hallmark placed its scrapbook supplies, photo albums, and related supplies into one
.
product group because
A. it was easier to forecast future sales since there were fewer market-product
combinations.
B. customers could buy in quantity and take advantage of quantity discounts.
C. their suppliers provided free displays and shelving to highlight Hallmark's
products.
D. it helped buyers relate to the products and make decisions in a more meaningful
way.
E. it allowed customers to compare price and quality with competitors who displayed
their products in a similar manner.
150 A market-product grid is a framework to relate
.
A. total estimated expenses for each product sold to each market segment.
B. total anticipated revenue for each product-market segment combination.
C. total anticipated profit for each product sold to each market segment.
D. the market segments of current buyers to relative market share compared to the
largest competitor.
E. the market segments of potential buyers to products offered or potential
marketing actions by an organization.
151 A market-product grid is a framework to relate the __________ to products offered or
.
A.
B.
C.
D.
E.

152 A market-product grid is a framework to relate the market segments of potential

.
buyers to
A.
C.
D.
E.
8-40
153 Each cell of the complete market-product grid shows the __________.
.
A.
B.
C.
D.
E.
relative market share

estimated market size
investment required to reach the market
market growth rate
estimated profit
154 After establishing the market segments and product groupings on a market-product
.
grid, the next step is to
A. fill in the appropriate cells with precise statistical data from primary and/or
secondary sources.
B. estimate, with intelligent guesstimates as necessary, the market size for each cell
using a simple scale, such as from zero to three.
C. total the vertical columns to identify the greatest marketing synergies and
efficiencies.
D. total the horizontal rows to identify greatest operations/production synergies and
efficiencies.
E. identify a marketing action for every product-market combination in the grid.
155 One advantage of a market-product grid is that it can be used to
.
A. make cost-cutting decisions under conditions of uncertainty.
B. screen many new product ideas in order to select the one with the best long-run
market potential.
C. determine which target market segments to select and which product groupings to
offer.
D. select representative samples of consumers for marketing research studies.
E. relate the product life cycle to consumer demand.
156 Determining the size of specific markets within a market-product grid is helpful in
.
determining which target market segments to select and
A.
B.
C.
D.
E.
how to implement the 80-20 rule.

which products to group into meaningful categories.
how to implement a harvesting strategy.
which product groupings to offer.
which products to reposition.
8-41
Figure 8-6
157 Figure 8-6 above shows the market-product grid for a Wendy's restaurant next to a
.
large urban university campus. The best way to describe how the student market is
segmented is
A. whether the student is a faculty or staff member.

B. whether the student lives near the campus or far away.
C. whether the student has the disposable income to eat at Wendy's.
D. combining the factors of where the student lives and when (s)he is on campus.
E.
the meals eaten at the Wendy's restaurant.
.
large urban university campus. Assume a large market (shown by a 3) is three times
the size of a small market (shown by a 1) and a medium market (shown by a 2) is
twice the size of a small market. The meal occasion (product grouping) that
comprises the largest product grouping is
A.
B.
C.
D.
E.
breakfast.
lunch.
between-meal snack.
dinner.
after-dinner snack.
8-42
.
large urban university campus. Assume a large market (shown by a 3) is three times
the size of a small market (shown by a 1) and a medium market (shown by a 2) is
twice the size of a small market. The largest potential market segment consists of
A.
B.
C.
D.
E.
students that live in a dormitory.

students that live in an apartment.
students that are day commuters.
students that are night commuters.
faculty or staff members.
160 All of the following are criterion used for selecting target market segments EXCEPT:
.
A. compatibility with the organization's objectives and resources.
B.
market size.
C. simplicity and cost of assigning potential buyers to segments.
D.
competitive position.
E.
161 Which of the following is a criterion used for selecting a target market?
.
A. similarity of needs of potential buyers within a segment
B. difference of needs of sellers between segments
C. feasibility of a marketing action to reach a segment
D.
market size
E. simplicity and cost of assigning potential buyers to segments
162 Which of the following is a criterion used for selecting a target market?
.
A. similarity of needs of potential buyers within a segment
B. difference of needs of buyers between segments
C.
expected growth of a segment
D. feasibility of a marketing action to reach a segment
E. simplicity and cost of assigning potential buyers to segments
163 Which of the following is a criterion used for selecting a target segment?
.
A.
B.
C.
D.
E.
potential for increased profit

competitive position
similarity of needs of potential buyers within a segment
difference of needs of buyers among segments
potential of a marketing action to reach a segment
8-43
164 Which of the following is a criterion used for selecting a target segment?
.
A.
C.
cost of reaching the segment
D. difference of needs of buyers among segments
E. potential of a marketing action to reach a segment
165 Five general criteria are often used to select target segments. They include: (1) the
.
size of the market; (2) expected growth of the market; (3) competitive position of the
firm with respect to the market; (4) cost of reaching the segment; and __________.
A. compatibility with the organization's objectives and resources

B. potential of a marketing action to reach a segment
C. similarity of needs of potential buyers within a segment
D. difference of needs of buyers among segments
E.
166 It is not recommended that a firm select a target segment that
.
A.
would require entry in a global marketplace.
B.
requires more than one marketing action.
C. has few competitors that target this same segment.
D. is incompatible with its company's goals or objectives.
E. has a growth potential that would require increasing the current workforce.
167 Best Foods Company is considering expanding beyond the regional market segments
.
now served by its Hellmann's mayonnaise. One criterion management wants to use
to evaluate potential new geographic market segments is whether additional real
estate must be purchased or leased to serve new segments. This is an example of
which criterion used to select target market segments?
A.
B.
C.
D.
E.
Best Foods' competitive position in the segment

Best Foods' product groupings
expected growth of the market segment
size of the market segment
8-44
168 A rehabilitation center wants to target women in their 20s who have received some
.
permanent disability as the result of a skiing accident. In terms of the criteria used
for selecting a target segment, this market would
A.
have no expected growth.
B. not be compatible with the company's current resources.
C. not be worth doing since its market size is very small.
D. not be readily accessible to the firm's marketing programs.
E.
be relatively expensive to reach.
169 During its market segmentation process for the Nike LeBron X basketball shoe, which
.
sells for $200+ a pair, Nike decided to concentrate on affluent teens rather than
members of high school basketball teams. This is an example of
A.
selecting target market segments to reach.
B.
forming products to be sold into groups.
C. developing a market-product grid and estimating size of markets.
D. taking marketing actions to reach target markets.
E.
forming prospective buyers into segments.
170 Doris Lewis owns Lewis Edibles, Inc., a company that makes Tongue Tinglin' BBQ
.
Sauce. She wants to target local people who like the special blend of flavors found
only in North Carolina barbecue sauce. In developing a marketing strategy to sell the
sauce, Lewis decided to join Goodness Grows in North Carolina, a specialty food
association that advertises local products and distributes them to local supermarkets
and gourmet shops. Lewis has just
A. formed a market segment using critical product features.

B.
formed products to be sold into groups.
C. developed a market-product grid and estimating size of markets.
D. taken a marketing action to reach a target market segment.
E.
formed prospective buyers into segments.
8-45
Figure 8-7
.
large urban university campus with chosen market segments and product groupings.
The next step is to develop a simple marketing action to reach a target market.
Placing flyers under windshield wipers of cars parked in student parking lots on
weekdays between 7:00 a.m. and 4:00 p.m. that offer a $2 off coupon on lunch meal
would be especially targeted at potential
A.
B.
C.
D.
E.
faculty customers.
staff customers.
day commuter customers.
night commuter customers.
nonstudent customers.
.
large urban university campus with chosen market segments and product groupings.
The next step is to develop a simple marketing action to reach a target market.
Sending out coupons for 10 percent off all purchases between 2:00 p.m. and 4:30
p.m. during the winter quarter would target potential
A.
B.
C.
D.
E.
dormitory customers.
between-meal snack customers.
after-dinner snack customers.
apartment customers.
8-46
173 Which of the following competitors mentioned in the textbook should the owner of a
.
Wendy's restaurant monitor closely due to its explosive growth in the number of
current and proposed locations - one that is or may soon be near this Wendy's?
A.
B.
C.
D.
E.
Burger King
In-N-Out Burger
McDonald's
Five Guys Burgers
Smashburger
174 When considering the quick-service restaurant competition, it will be most important
.
for Wendy's to consider not only the offerings of Burger King, McDonald's, Five Guys
Burgers, and other hamburger chains but also the
A.
meals at golf and country clubs.
B. dormitory meal plans at surrounding colleges and universities.
C. items for sale at gas stations and convenience stores.
D.
local farmer's markets that sell produce.
E. nearly every food item sold at local grocery stores.
175 In the early 1980s, Apple, Inc. was often called "Camp Runamok" because
.
A. every employee was encouraged to do his or her own thing.
B. it was concentrating on laptops while everyone else was concentrating on personal
computers.
C. all the employees were so young, so they often played more than they worked.
D. there were no coherent product lines targeted at identifiable market segments.
E. its personal computers were running amok with viruses, spyware, and other
problems.
8-47
Apple Market-Product Grid

176 In the Apple market-product grid shown above for its personal computer line, the
.
professional segment of medium/large businesses seems willing to purchase all of
the items in Apple's product line. This allows Apple to enjoy cost savings due to
__________.
A.
B.
C.
D.
E.
segment differentiation
marketing synergies
product synergies
segment repositioning
177 According to the Apple market-product grid above, Apple would most likely get the
.
LEAST market synergies from
A.
B.
C.
D.
E.
teachers and college staff.

individuals and small home office users.
medium/large businesses and college faculty.
students, teachers, and college faculty.
creative professionals.
8-48
178 In the Apple market-product grid shown above for its personal computer line, the
.
iMac is popular among all the segments Apple can target. This allows Apple to enjoy
__________.
A.
B.
C.
D.
E.
segmentation synergies
marketing synergies
product synergies
the 80/20 rule
frequency marketing
179 According to the Apple market-product grid above, Apple would most likely get the
.
LEAST product synergies from the
A.
B.
C.
D.
E.
Mac Pro and MacBook Pro.

Mac Pro and iMac.
Mac Pro and MacBook Air.
Mac Pro and Mac Mini.
iMac and Mac Mini.
180 Two key types of synergies are __________.

.
A.
B.
C.
D.
E.
supplier and distributor synergies

market and product synergies
industry-dominated and consumer-dominated
product and production synergies
consumer and market synergies
181 Marketing synergies often come at the expense of product synergies because
.
A. product synergies are more effective for penetrating a market rather than creating
one.
B. multiple market segments usually require multiple products.
C. it is easier to change a product than to completely develop a new marketing plan.
D. a single customer segment will likely require a variety of products.
E. no company can afford to do both at the same time.
8-49
182 __________ often come at the expense of __________ because a single customer
.
segment will likely require a variety of products, each of which will have to designed
and manufactured.
A.
B.
C.
D.
E.
Product synergies; marketing synergies

Marketing synergies; product synergies
Supplier synergies; consumer synergies
Distributor synergies; supplier synergies
Marketing synergies; finance synergies
183 The place a product occupies in consumers' minds on important attributes relative to
.
competitive products is referred to as
A.
B.
C.
D.
E.
product repositioning.
relative positioning.
competitive positioning.
product positioning.
selective perception.
184 Product positioning refers to

.
A. an outdated concept that assigns product value by association with social class.
B. the place a product offering occupies in consumers' minds on important attributes.
C. the competitive advantage of one product over another.
D. changing the place a product occupies in a consumer's mind relative to
competitive products.
E. using a market-product grid to place products in their appropriate places on that
grid to identify potential untapped markets.
185 Changing the place an offering occupies in consumers' minds relative to competitive
.
products is referred to as
A.
B.
C.
D.
E.
product placement.
perceptual mapping.
8-50
186 Product repositioning refers to

.
A. the place a product offering occupies in consumers' minds on important attributes.
B. using a market-product grid to place products in their appropriate places on that
grid to identify potential untapped markets.
C. changing the place an offering occupies in consumers' minds relative to
D. the practice of selling off a firm's least successful product line and redirecting that
revenue into a totally new product.
E. the competitive advantage of one product over another.
187 Recently, U.S. dairies, struggling to increase milk sales, tried to change the way
.
adults thought about chocolate milk. The dairies wanted to __________ chocolate milk
in the minds of adult consumers.
A.
B.
C.
D.
E.
segment
differentiate
explain
promote
reposition
188 Mott's used an advertising campaign to change the way consumers thought about its
.
applesauce from a dinnertime side dish to a replacement for cooking oil in baking.
The advertising message was that using applesauce in baking cuts calories and
makes the resulting baked good healthier. Mott's used a __________ strategy.
A.
B.
C.
D.
E.
product repositioning
perceptual mapping
product positioning
psychographic
189 Positioning that involves competing directly with competitors on similar product
.
attributes in the same target market is referred to as __________.
A.
B.
C.
D.
E.
competitive repositioning
position downsizing
differentiation positioning
head-to-head positioning
product distinction positioning
8-51
190 One approach to positioning a new product in a market is __________ positioning,

.
which involves competing directly with competitors on similar product attributes in
the same target market.
A.
B.
C.
D.
E.
perceptual
head-to-head
psychological
differentiation
market
191 Head-to-head positioning requires a product to

.
A.
B.
C.
D.
E.
compete with products from competitors of the same size and country of origin.
compete with competitors on similar product attributes but in a different market.
compete with competitors on similar product attributes in the same market.
compete against very similar products from its own company.
compete against a single competitor with an identical offering.
192 In the athletic shoe market, Reebok and Nike practice __________ positioning since
.
both manufacturers vie for the same customers with technologically advanced
products.
A.
B.
C.
D.
E.
psychological
perceptual
differentiation
head-to-head
market
193 A positioning approach that involves seeking a less competitive, smaller market
.
niche in which to locate a brand is referred to as __________.
A.
B.
C.
D.
E.
downsize positioning
8-52
194 Differentiation positioning requires a product to

.
A. emphasize unique product attributes to compete directly with competitors.
B. compete directly with competitors on similar product attributes in the same target
market.
C. compete with competitors on similar product attributes but in a different market.
D. seek a less-competitive, smaller market niche in which to locate a brand.
E. develop marketing actions to move a product or brand to an ideal position.
195 In the sneaker business, Heelys practiced __________ positioning when it introduced a
.
line of Heelys sneakers that came with an imbedded, detachable wheel in the shoe's
heel marketed to young teens.
A.
B.
C.
D.
E.
head-to-head
parallel market
lateral
repositioning
differentiation
196 Some Timex wristwatches can be purchased for less than $30 while Rolex
.
wristwatches may carry a price tag of several thousand dollars. In general,
consumers view Timex watches as being dependable, relatively accurate, and
inexpensive timepieces that can be purchased in drug stores, discount stores, and
department stores. The Rolex brand is perceived as an expensive status symbol
distributed in fine jewelry stores or specialty shops. By using distinctly different
pricing and distribution strategies, the marketers of Rolex watches
A.
B.
C.
D.
E.
compete for the same segment through different channels of distribution.

develop similar products as Timex but under different names.
use a differentiation positioning strategy.
compete for the same customers through similar retail outlets.
create cognitive dissonance in consumers who purchased Timex wristwatches.
197 "For upscale American families who desire a carefree driving experience, Volvo is a
.
premium-priced automobile that offers the utmost in safety and dependability" is a
__________ statement for Volvo in North America.
A.
B.
C.
D.
E.
perception
positioning
market-product
vision
differentiation
8-53
198 A means of displaying or graphing in two dimensions the location of products or

.
brands in the minds of consumers to enable a manager to see how consumers
perceive competing products or brands, as well as its own product or brand, is
referred to as a
A.
B.
C.
D.
E.
perception matrix.
growth-share matrix.
market-product grid.
perceptual map.
product differentiation chart.
199 A perceptual map refers to

.
A. a framework used to compare one firm's product offerings with another firm's
offerings in relationship to their relative market share.
B. a framework used to demonstrate the growth or decline of specific market
segments within an industry.
C. a means of displaying or graphing in two dimensions the location of products or
perceive competing products or brands, as well as its own product or brand.
D. a framework to relate the market segments of potential buyers to the products
E. the place a product occupies in a single consumer's mind on unimportant
attributes relative to competitive products.
200 A graph displaying consumers' perceptions of product attributes in two dimensions is
.
referred to as a
A.
B.
C.
D.
E.
perceptual map.
perception matrix.
201 Marketers use perceptual maps as a means to display or graph in two dimensions the
.
location of products or brands
A. against large market segments in a market-product grid.

B. against small market segments in a market-product grid.
C. in virtual space that represents the business or product's time in existence and
growth.
D.
in the minds of consumers.
E. against the revenues generated by other products or brands within the company.
8-54
202 A perceptual map enables a manager to see how __________ perceive competing
.
products or brands, as well as the firm's own product or brand.
A.
stakeholders
B.
competitors
C. independent rating organizations such as Consumer Reports
D.
consumers
E.
the CEO of the firm
203 The axes on a perceptual map are
.
A.
sales and profitability.
B. two product attributes, ranging from high to low on that attribute.
C.
market share and market growth rate.
D.
product variety and profitability.
E. customer perceptions of the firm's product versus the brand of the firm's principal
competitor.
204 Which of these is collected from consumers to develop a product's perceptual map?
.
A. consumer judgments about the important attributes for a product or brand class
B. a listing of all prospective brands and products
C. managerial judgments about how consumers perceive products
D. rank order of the ratings of an existing brand's preference relative to its
competitors
E. detailed explanations of why consumers make the choices they do
205 To effectively positioning a product or brand, companies take four steps: (1)
.
__________; (2) discover how target customers rate competing products or brands
with respect to critical attributes; (3) discover where the company's product or brand
is on these attributes in the minds of potential customers; and (4) reposition the
company's product or brand in the minds of potential customers.
A. decide whether to keep or delete the market segment that your product offering
targets
B. identify the competitors' brands that make up the consideration set
C. identify the important attributes for the product or brand class
D. create a marketing plan based on customers' perceptions
E. identify market niches that were not selected during the market segmentation
process
8-55
206 To effectively positioning a product or brand, companies take four steps: (1) identify
.
the important attributes for the product or brand class; (2)__________; (3) discover
where the company's product or brand is on these attributes in the minds of
potential customers; and (4) reposition the company's product or brand in the minds
of potential customers.
A. decide whether to keep or delete the market segment that your product offering
targets
C. identify market niches that were not selected during the market segmentation
process
D. discover how target customers rate competing products or brands with respect to
these attributes
E. create a marketing plan based on customers' perceptions
207 To effectively positioning a product or brand, companies take four steps: (1) identify
.
the important attributes for the product or brand class; (2) discover how target
customers rate competing products or brands with respect to these attributes; (3)
___________; and (4) reposition the company's product or brand in the minds of
potential customers.
A. discover where the company's product or brand is on these attributes in the minds
of potential customers
B. decide whether to keep or delete the market segment that your product offering
targets
C. identify the competitors' brands that make up the consideration set
process
8-56
Figure 8-A
208 Figure 8-A above is a depiction of a __________ for beverages in the minds of adults.
.
A.
B.
C.
D.
E.
hierarchy of needs
perceptual map
marketing matrix
growth-share matrix
perception matrix
209 The perceptual map in Figure 8-A above shows adult perceptions for beverages.
.
Suppose a marketer is introducing a new beverage that is higher-than-average in
nutrition and is intended for adults. It will probably be most useful to promote the
drink as similar to what?
A.
B.
C.
D.
E.
tea
fruit-flavored drinks
sugared soft drinks
regular milk
coffee
8-57
210 Assume that the perceptual map in Figure 8-A is an accurate representation for adult
.
consumers. A heavy consumer of mineral water is likely to think that mineral water
is
A.
more nutritious than tea.
B. more nutritious and a more adult-oriented beverage than milk shakes.
C. a more adult-oriented beverage than nutritionally designed diet drinks.
D. less nutritious and a more adult-oriented beverage than fruit-flavored drinks.
E. a more adult-oriented beverage than sports drinks.
211 By dividing its tennis racquet market into three categories, which it labels
.
Performance, Recreational, and Junior tennis players, Prince Sports is using a
marketing strategy called
A.
B.
C.
D.
E.
product innovation.
market delineation.
product groupings.
212 The O3 technology refers to an innovative tennis racquet Prince Sports developed
.
that simultaneously delivers faster racquet speed and a bigger sweet spot in the
middle of the frame. Prince Sports has implemented a __________ strategy with its O 3
innovative tennis racquet technology.
A.
B.
C.
D.
E.
competitive segmentation
head-to-head
usage segmentation
market segmentation
213 The segmentation strategy used by Prince Sports today is

.
A.
B.
C.
D.
E.
geographic.
behavioral.
psychographic.
socioeconomic.
resource-based.
Short Answer Questions
8-58
214 What is market segmentation and why is it important?

.
215 What is product differentiation? How does it relate to market segmentation? How
.
does it potentially improve a firm's revenues?
216 Describe the market segmentation process.

.
8-59
217 Why would an organization produce a single product or service and then attempt to
.
sell it to two or more market segments?
218 Why would an organization produce multiple products or services and then attempt
.
to sell them to two or more market segments?
219 Explain the difference between mass customization and build-to-order.

.
8-60
220 There are five key steps in segmenting and targeting markets, which link market
.
needs of customers to the organization's marketing program. List these five key
steps.
221 A marketing manager should develop segments for a market that meet five principal
.
criteria. List these important factors in forming market segments.
222 A nonprofit food bank was handing out food to anyone who requested it on a weekly
.
basis. It now wants to give free food only to people who go hungry on a daily basis.
This will be the market segment it targets. How does the formation of its market
segments differ from the strategy used for a retail store?
8-61
223 Describe the four general bases that are used to segment consumer markets.
.
224 Assume you are manager of The Outback Steak House, a franchised restaurant that
.
has opened at new location in St. Louis. Describe which segmentation base(s) and
possible segmentation variable(s) you would use to segment its market and explain
why each supports the appropriate market segmentation strategy.
225 Explain the 80/20 rule.

.
8-62
226 What are the segmentation bases for U.S. organizational (business) markets?
.
227 Explain what a market-product grid is and how it is used.

.
228 What are the criteria used to select target markets?

.
229 Explain the difference between marketing synergies and product synergies.
.
8-63
230 Define product positioning. What are two approaches to product positioning? Give an
.
example of each approach.
231 What are the three types of data needed from consumers to develop a perceptual
.
map?
232 What are the four steps to positioning a product with a perceptual map?
.
8-64
Chapter 08 Market Segmentation, Targeting, and Positioning

Answer Key
Multiple Choice Questions
1.
The company name Zappos was chosen because it
(p. 188
)
A.
B.
C.
D.
E.
was the founder's family name.

conveyed in Spanish the type of product sold.
inferred how quickly you could purchase the product.
contained letters from the names of the three founders.
reflected the brand name of the first line of shoes they sold.
The company name is derived from the Spanish word zapatos, which means shoes.
AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Understand
Learning Objective: 08-05 Explain how marketing managers position products in the marketplace.
Level of Difficulty: 2 Medium
Topic: Chapter Opener: Zappos.com
2.
The primary focus of Zappos' market segmentation strategy is to sell
(p. 188
)
A. a wide selection of shoes, clothes, accessories, and housewares to people who

will buy them online.
B. a wide selection of leather shoes and boots to retailers.
C. all types of shoes, accessories, and clothing to department stores.
D.
Spanish novelties and accessories to organizations.
E.
shoes in its own retail stores.
Hsieh, Lin, and founder Nick Swinmurn have given Zappos a clear, specific market
segmentation strategy: sell a huge selection of shoes, clothes, accessories, and
housewares to people who will buy them online.

Blooms: Understand
Learning Objective: 08-04 Develop a market-product grid to identify a target market and recommend resulting
marketing actions.
8-65
3.
The Zappos segmentation strategy is based on
(p. 188
)
A. offering the best selection of shoes and the best service to online shoppers.
B.
designing shoes for every type of occasion.
C. dividing all their customers into two distinct segments: people shopping for low
price and people shopping for style.
D. offering the best selection of shoes through multiple channels of distribution.
E. maintaining the simplest method of price points to make the purchase process
easy.
Zappos.com has a clear, specific market segmentation strategy: Offer a huge
selection of shoes to people who will buy them online. Asked about Zappos.com,
Hsieh says, "We try to spend most of our time on stuff that will improve customerservice levels."

Blooms: Understand
marketing actions.
4.
Which of the following statements about Zappos is most accurate?
(p. 188
)
A. Zappos limits its inventory to a selection of high-end fashion footwear.

B.
Zappos carries more than 1,000 different brands.
C. Zappos can guarantee overnight shipping to all its customers because they
know ahead of time what they will be charged for express service.
D. Zappos is so successful because it has chosen a single mission to "sell shoes
and nothing else."
E. Zappos offers a 30/60/90 return policy whereby refunds are based on how long
you have had the shoes.
Zappos carries more than 1,000 different brands. Recently, Zappos has added
lines of clothes, accessories, and housewares.

Blooms: Understand
Learning Objective: 08-01 Explain what market segmentation is and when to use it.
8-66
5.
(p. 188
)
According to Tony Hsieh, CEO of Zappos, the company devotes the greatest
amount of time to
A. seeking out new and unusual styles of shoes from all over the world.
B. improving the website to make it faster, more interesting, and fun.
C. seeking out new markets that will go beyond the Internet.
D. finding the fastest and least expensive modes of delivery for its products.
E.
finding ways to improve customer-service levels.
Asked about Zappos, Tony Hsieh says, "We try to spend most of our time on stuff
that will improve customer-service levels." This customer service obsession for its
market segment of online customers means that all new Zappos employees whether the chief financial officer or children's footwear buyer - go through four
weeks of customer-loyalty training.

Blooms: Understand
6.
Tony Hsieh, CEO of Zappos, offers one month's salary to anyone who
(p. 188
)
A. identifies a completely new market segment with a product to match it.

B.
finds a way of improving service to online customers.
C. takes the customer loyalty training class and decides to quit anyway.
D. finds a shoe-related product that Zappos does not already carry.
E. creates a humorous theme for one of the monthly company meetings.
Hsieh offers $2,000 to anyone who wants to leave Zappos after completing the
training. The theory: If you take the money and run, you're not right for Zappos.
Few take the money!

Blooms: Understand
8-67
7.
(p. 188
)
Building open and honest relationships with communication is an example of

Zappos' __________.
A.
B.
C.
D.
E.
profile for its target market

best practices being adapted from its new owner, Amazon.com
ten core values for Zappos' culture
qualities required of Zappos' suppliers
qualities required of Zappos' retailers
Ten core values are the foundation for the Zappos culture, brand, and business
strategies. These include: deliver WOW through service, create fun and a little
weirdness, and build open and honest relationships with communication, just to
name a few.

Blooms: Understand
8.
(p. 190
)
Aggregating prospective buyers into groups that have common needs and will
respond similarly to a marketing action is referred to as
A.
B.
C.
D.
E.
consumer differentiation.
psychographics.
market delineation.
aggregation marketing.
Key term definition - market segmentation.

Blooms: Remember
Level of Difficulty: 1 Easy
Topic: Market segmentation
8-68
9.
Market segmentation refers to
(p. 190
)
A. the philosophy that to do a truly excellent job of marketing, a company should

concentrate on only one customer segment at a time.
B. sorting prospective buyers into groups that are willing to pay more than the
cost of production for a good or service.
C. disaggregating prospective buyers from groups into segments of one
(individuals) and then creating specific products that will satisfy this person's
unique needs.
D. aggregating prospective buyers into groups that have common needs and will
E. the belief that it is possible to satisfy every customer's needs if you can identify
the correct segment within which they belong.
Key term definition - market segmentation.

Blooms: Remember
10.
(p. 190
)
A basic test of the usefulness of the market segmentation process is whether it

leads to tangible marketing actions that can
A.
B.
C.
D.
E.
increase sales and profitability.

stand up to legal scrutiny.
be socially responsible.
create sustainable demand.
produce product differentiation.
The segmentation process is a means to an end: it leads to tangible marketing

actions that can increase sales and profitability.

Blooms: Understand
8-69
11.
(p. 190
)
Market segmentation involves aggregating prospective buyers into groups that

__________ and will respond similarly to a marketing action.
A.
B.
C.
D.
E.
respond similarly to marketing messages

have similar shopping styles
will become loyal customers
have common needs
will become stakeholders of the organization
Market segmentation involves aggregating prospective buyers into groups or

segments that (1) have common needs and (2) will respond similarly to a
marketing action.

Blooms: Understand
12.
(p. 190
)

have common needs and will
A.
B.
C.
D.
E.
pay attention to marketing messages.

be responsive to marketing research.
use the same payment methods.
comply with the organization's core values.
Market segmentation involves aggregating prospective buyers into groups or

segments that (1) have common needs and (2) will respond similarly to a
marketing action.

Blooms: Understand
8-70
13.
(p. 190
)
Market segmentation stresses __________ and relating them to specific marketing

actions.
A.
aligning tasks to match competitor tactics
B.
grouping people according to similar needs
C. dividing people within a market randomly into equally sized groups
D.
dividing people into the smallest groups possible
E. identifying potential new buyers who are not yet familiar with a new product
Market segmentation first stresses the importance of grouping people or
organizations in a market according to the similarity of their needs and the
benefits they are looking for in making a purchase. Second, such needs and
benefits must be related to specific marketing actions the organization can take to
reach each market segment.

Blooms: Understand
14.
(p. 190
)
Small athletic shoe manufacturers such as Vans have targeted niche markets and
make shoes designed to satisfy the needs of different specific groups of
customers. This strategy is an example of
A.
B.
C.
D.
E.
mass customization.
customized manufacturing.
Market segmentation links market needs to an organization's marketing program specific marketing mix actions that satisfy customers' needs.

Blooms: Apply
Level of Difficulty: 3 Hard
8-71
15.
(p. 190
)
New Balance makes the Minimus line of shoes with a Vibram outsole and REVlite
cushioning for those who want to "feel the trail." Its 1260v2 shoe incorporates
Stabilicore technology to "deliver a plush, smooth, and stable ride." And its Made
in America, top of the line, 990v3 traditional running/walking shoe uses a
"premium pigskin upper with mesh inserts for breathability, a stability-enhancing
ABZORB idsole, and ENCAP to promote a healthy gait." The strategy of appealing
to different types of customers in this way is an example of
A.
B.
C.
D.
E.
mass customization.
product definition.
Market segmentation links market needs to an organization's marketing program specific marketing mix actions to satisfy those needs. New Balance targets the
specific needs of particular segments of runners with its different types of shoes.

Blooms: Apply
16.
Market segments refer to
(p. 190
)
A. the relatively heterogeneous groups of prospective buyers that result from the
B. all buyers of a product or service who have previously purchased a particular
firm's products or services and who intend to repeat that purchase sometime in
the future.
C. the smallest number of buyers that have similar needs but do not react
similarly in a buying situation.
D. the relatively homogenous groups of prospective buyers that result from the
E. all potential buyers of a product or service who intend to purchase a firm's
products or services but who have not yet done so.
Text term definition - market segment.

Blooms: Remember
Topic: Market segments
8-72
17.
(p. 190
)
A relatively homogenous group of prospective buyers that results from the market
segmentation process is referred to as a(n) __________.
A.
B.
C.
D.
E.
market segment
target market
customer base
ultimate consumer
preferred customer
Text term definition - market segment.

Blooms: Remember
18.
To be identified as a market segment, members of the group must
(p. 190
)
A.
be similar in terms of their consumption behavior.
B. represent a large share of the entire market and have buying power.
C. have diverse needs and have potential for future growth.
D. have diverse needs and be willing and able to purchase the product.
E. have the potential for future growth and increased profit or ROI.
Market segments are the relatively homogeneous groups of prospective buyers
that result from the market segmentation process. Each market segment consists
of people who are relatively similar to each other in terms of their consumption
behavior.

Blooms: Understand
8-73
19.
(p. 190
)
The phrase "relatively homogeneous collections of prospective buyers" is most

descriptive of
A.
B.
C.
D.
E.
demographic clusters.
organizational buyers.
ultimate consumers.
market segments.
qualified prospects.

that result from the market segmentation process.

Blooms: Understand
20.
(p. 190
)
In marketing, each __________ consists of people who are relatively similar to each
other in terms of their consumption behavior.
A.
B.
C.
D.
E.
demographic cluster
organizational buyer group
market segment
ultimate consumer group
qualified prospect group

that result from the market segmentation process. Each market segment consists
of people who are relatively similar to each other in terms of their consumption
behavior.

Blooms: Understand
8-74
21.
(p. 190
)
A marketing strategy that involves a firm using different marketing mix actions to
products is referred to as __________.
A.
B.
C.
D.
E.
market penetration
points of difference
market differentiation
product positioning
Key term definition - product differentiation.

Blooms: Remember
Topic: Product differentiation
22.
Product differentiation refers to
(p. 190
)
A. a good, service, or idea consisting of a bundle of tangible and intangible

attributes that satisfies consumers' needs.
B. the unique combination of product benefits received by targeted buyers.
C. those characteristics of a product that make it superior to competitive
substitutes.
D. a marketing strategy that involves a firm using different marketing mix actions
to help consumers perceive the product as being different and better than
competing products.
E. the legal requirement that requires a specified degree of distinction between
products to ensure an organization's intellectual property rights.
Key term definition - product differentiation.

Blooms: Remember
8-75
23.
(p. 190
)
Apple's iPhone has a feature known as Apple Pay that lets you use your phone to
pay for credit purchases, meaning you could leave your wallet at home. This
feature sets the smartphone apart from its competitors and is part of Apple's
strategy for
A.
B.
C.
D.
E.
market expansion.
usage segmentation.
Product differentiation involves a firm's using different marketing mix actions, such
as product features and advertising, to help consumers perceive the product as
being different and better than competing products. In the case of Apple, Apple
Pay helps consumers to perceive the iPhone as being different from and better
than competing products from Samsung, LG, etc.

Blooms: Apply
24.
(p. 190
)
Recently Colgate-Palmolive introduced Colgate Enamel Health toothpaste, one that

claims to replenish and polish tooth enamel, the hard outer layer of the tooth that
provides a protective barrier to inner layers. This new formula helps to separate
the Colgate product from its top competitors, such as Crest. What marketing
strategy did Colgate-Palmolive use here?
A.
B.
C.
D.
E.
market expansion
usage segmentation
being different and better than competing products. In the case of Colgate, Enamel
Health helps consumers to perceive the toothpaste as being different from and
better than competing products like Crest.

Blooms: Apply
8-76
25.
(p. 190
)
Alka-Seltzer was made originally as a hangover remedy that cured the headache
and settled the stomach. Today, you can buy Original Alka-Seltzer, Extra Strength
Alka-Seltzer, Alka-Seltzer Morning Relief (for morning headaches and fatigue), and
Alka-Seltzer Heartburn Relief. Each Alka-Seltzer product has a unique formulation
to relieve a specific malady that makes them more specialized than competing
products. The maker of Alka-Seltzer is using
A.
B.
C.
D.
E.
product variation.
market sectioning.
product base development.
being different and better than competing products. Bayer, the maker of AlkaSeltzer, is selling four versions with different product features to appeal to different
market segments.

Blooms: Apply
26.
(p. 190
)
The process of segmenting a market and selecting specific segments as targets is

the link between __________ and the organization's marketing program.
A.
B.
C.
D.
E.
self-regulatory industry standards

government regulations
top-level management
buyers' or market needs
controllable environmental factors
The process of segmenting and targeting markets links buyer or market needs to
an organization's marketing program. See Figure 8-1.

Blooms: Understand
Topic: Segmentation: linking needs to actions
8-77
27.
(p. 190
)

the link between the various buyers' or market needs and
A.
B.
C.
D.
E.
industry standards.
government regulations.
top-level management.
controllable environmental factors.
the organization's marketing program.
Figure 8-1 illustrates how the process of segmenting and targeting markets links
buyers' or market needs to an organization's marketing program.

Blooms: Understand
Figure 8-1
8-78
28.
(p. 190
)
In Figure 8-1 above, Box A represents which stage of the market segmentation
process?
A.
B.
C.
D.
E.

Market segmentation links market needs to an organization's marketing program specific marketing mix actions to satisfy those needs. The stages in the market
segmentation process are: (A) identify market needs; (B) link needs to actions; and
(C) execute marketing program actions.

Blooms: Understand
29.
(p. 190
)
In Figure 8-1 above, B represents which stage of the market segmentation

process?
A.
B.
C.
D.
E.


Blooms: Understand
8-79
30.
(p. 190
)
In Figure 8-1 above, C represents which stage of the market segmentation

process?
A.
B.
C.
D.
E.


Blooms: Understand
31.
(p. 190
)
Zappos' original target market customers consisted of people who wanted all of
the following EXCEPT:
A.
B.
C.
D.
E.
to receive quick delivery of their merchandise.

to buy sustainable shoes, accessories, and clothing.
to shop online in the convenience of their own homes.
to allow for free returns of goods if dissatisfied.
to have a wide selection of shoes.
The Zappos.com target customer segment originally consisted of people who

wanted to (1) have a wide selection of shoes, (2) shop online in the convenience of
their own homes, and (3) receive quick delivery and allow free returns.

Blooms: Understand
Topic: Zappos segmentation strategy
8-80
32.
(p. 191
)
A framework to relate the market segments of potential buyers to products offered

or potential marketing actions by an organization is referred to as a __________.
A.
B.
C.
D.
E.
payoff table
cross-tabulation
market-product grid
growth-share matrix
product differentiation table
Key term definition - market-product grid.

Blooms: Remember
Topic: Market-product grid
33.
A market-product grid refers to
(p. 191
)
A. a visual representation of all products offered within a specific product class.

B. a framework used to compare the relative market share of one firm's product
offerings to those of its competitors.
C. a technique that seeks opportunities by finding the optimum balance between
marketing efficiencies versus R&D-manufacturing efficiencies.
D. a framework used to relate the market segments of potential buyers to
products offered or potential marketing actions by an organization.
E. a technique that helps a firm search for growth opportunities from among
current and new markets as well as current and new products.

Blooms: Remember
8-81
34.
A market-product grid is a framework to relate
(p. 191
)
A.
B.
C.
D.
total estimated expenses for each product sold to each market segment.
total anticipated revenue for each product-market segment combination.
total anticipated profit for each product sold to each market segment.
the market segments of potential buyers to relative market share compared to
the largest competitor.

Blooms: Remember
35.
(p. 191
)
A market-product grid is a framework to relate the __________ to products offered or

A.
B.
C.
D.
E.

A market-product grid is a framework to relate the market segments of potential

buyers to products offered or potential marketing actions by an organization.

Blooms: Remember
8-82
36.
(p. 191
)

buyers to
A.
C.
D.
E.

Blooms: Remember
37.
(p. 191
)
To create a market-product grid for bed pillows, the most effective way to segment
the market would be using
A. the age of the sleeper: less than 18 years of age, 18 to 44 years of age, or 45
years and older.
B. the sleeper's annual income: less than $25,000, $25,000 to $49,999, or
$50,000 and over.
C.
the sleeper's gender: male or female.
D.
the time of sleep: day or night.
E.
how the sleeper sleeps: side, back, or stomach.
buyers to products offered or potential marketing actions. The market-product grid
for pillows shows the different market segments for bed pillows - the side, back,
and stomach sleepers - in the horizontal rows. The product offerings - the pillows appear in the vertical columns and are based on three different pillow firmnesses.
See Figure 8-2.

Blooms: Understand
8-83
38.
(p. 191
)
An analysis of the pillow market using a market-product grid suggests that the
most important segment to target is
A.
B.
C.
D.
E.
side sleepers.
sleepers with sleep disorders, such as sleep apnea.
sleepers with annual incomes of $50,000 and over.
back sleepers.
stomach sleepers.
The market-product grid for pillows shows the different market segments for bed
pillows - the side, back, and stomach sleepers - in the horizontal rows. The product
offerings - the pillows - appear in the vertical columns and are based on three
different pillow firmnesses. Market research reveals the size of each sleeper
segment, as shown by both the percentages and circles in Figure 8-2. The side
sleeper-firm pillow market-product segment is almost three times larger (73
percent) than the combined sizes of the other two. Therefore, meeting the needs
of this segment is especially important to a pillow manufacturer. See Figure 8-2.

Blooms: Understand
Figure 8-2
8-84
39.
(p. 191
)
Consider Figure 8-2 above. My Pillow uses infomercials and product

demonstrations at events such as state fairs to market its line of pillows that are
guaranteed to be "the most comfortable pillow you'll ever own!" Based on the
market research above, which market-product combination should My Pillow
target?
A.
B.
C.
D.
E.
stomach sleeper-firm pillow

back sleeper-medium pillow
side sleeper-firm pillow
stomach sleeper-soft pillow
side sleeper-soft pillow
A market segmentation research study among users of pillows revealed the size of
each sleeper segment, which is shown in Figure 8-2. The sizes and percentages of
the circles tells pillow manufacturers the relative importance of each of the three
market segments and three pillow offerings in terms of their firmness level. The
figure depicts the importance of the firm pillow product targeted at the side
sleeper market segment, which is almost three times the size of the other two
market-product combinations shown. Therefore, meeting the needs of this market
segment with the right pillow firmness is especially important. See Figure 8-2.

Blooms: Apply
40.
(p. 191
)
The purpose of market segmentation is to respond more effectively to the wants of

groups of potential buyers in order to
A.
B.
C.
D.
E.
maintain market share.

increase sales and profits.
assume social responsibility.
use the firm's resources most efficiently.
provide the best quality products on the market.
A business firm goes to the trouble and expense of segmenting its markets when it
expects that this will increase its sales, profit, and return on investment.

Blooms: Understand
Topic: When and how to segment markets
8-85
41.
(p. 191
)
Which of the following statements regarding when and how to segment markets is
most accurate?
A. Even if a firm finds only one potential market segment, it should take
advantage of the method to appear cutting-edge to its competitors and
customers.
B. Market segmentation only works for large corporations; small businesses don't
have the resources to engage in the process.
C. Governments should not attempt market segmentation because the strategy is
only applicable for consumer and organizational markets.
D. If a business firm goes to the trouble and expense of segmenting its markets, it
expects to increase its sales, profits, and return on investment.
E. Market segmentation strategies work less than 10 percent of the time.
A business goes to the trouble and expense of segmenting its markets when it
expects that the effort will increase its sales, profit, and return on investment.
When expenses are greater than the potentially increased sales from
segmentation, a firm should not attempt to segment its market.

Blooms: Understand
42.
(p. 191
)
When expenses are greater than the potential increased sales from market
segmentation, a firm should
A.
not consider market segmentation at this time.
B. combine departments within the company to make the process more
streamlined.
C. reduce production costs or increase prices to facilitate the segmentation
process.
D. seek alternate channels of distribution, including Internet sales.
E. discontinue manufacturing any products that are not in the mature stage of
their product life cycle.
A business goes to the trouble and expense of segmenting its markets when it
expects that the effort will increase its sales, profit, and return on investment.
When expenses are greater than the potentially increased sales from
segmentation, a firm should not attempt to segment its market.

Blooms: Understand
8-86

43.
All of the following are market segmentation strategies EXCEPT:
(p. 191
)
A.
B.
C.
D.
E.
build-to-order.
multiple products, multiple market segments.
one product, multiple market segments.
multiple products, one segment.
mass customization.
The segmentation strategies are (1) one product and multiple market segments,
(2) multiple products and multiple market segments, and (3) segments of one, or
mass customization, which is the next step beyond build-to-order (BTO) manufacturing a product only when there is an order from a customer.

Blooms: Understand
Topic: Market segmentation strategies
44.
(p. 191
)
When a firm produces only a single product or service and attempts to sell it to
two or more market segments, it avoids __________.
A. the extra cost of developing and producing additional versions of the product
B.
creating a customer service gap
C.
indirect distribution and logistics problems
D.
restructuring the firm's strategic planning
E.
amortization costs of product enhancements
When an organization produces only a single product or service and attempts to
sell it to two or more market segments, it avoids the extra costs of developing and
producing additional versions of the product. In this case, the incremental costs of
taking the product into new market segments are typically those of a separate
promotional campaign or a new channel of distribution.

Blooms: Understand
Topic: One product, multiple market segments
8-87
45.
(p. 191
)
When compared to a multiple products, multiple market segments strategy, a one

product, multiple market segment strategy
A. is a much more effective means of meeting consumers' individual needs.

B.
creates greater savings in production costs.
C. is a more effective way of meeting organizational objectives.
D.
has significantly higher distribution costs.
E. is more profitable since a firm can charge the new segments higher prices
without changing the product.
When a firm produces only a single product or service and attempts to sell it to
two or more market segments, it avoids the extra cost of developing and
producing additional versions of the product, which often entails higher expenses.

Blooms: Understand
46.
(p. 191
)
One marketing action that can be taken to sell a single product or service to
multiple market segments is to
A.
develop and produce another version of the product.
B.
manufacture products that appeal to different markets.
C.
develop separate promotional campaigns.
D. purchase another firm that has additional products that would appeal to
multiple markets.
E. issue stock to fund additional research and development for new products.
When an organization produces only a single product or service and attempts to
sell it to two or more market segments, it avoids the extra costs of developing and
producing additional versions of the product. In this case, the incremental costs of
taking the product into new market segments are typically those of a separate
promotional campaign or a new channel of distribution.

Blooms: Understand
8-88
47.
(p. 191
)
The annual Sporting News Baseball Yearbook had exactly the same stories but with
17 different covers to appeal to baseball fans in 17 different regions of the U.S.
What is the basis of its market segmentation strategy?
A.
B.
C.
D.
E.
retail outlet segmentation
The magazine has 17 different covers to appeal to sports fans in 17 different

geographic regions, clearly using the geographic variable as the basis for market
segmentation.

Blooms: Understand
Harry Potter books Photo
8-89
48.
(p. 192
)
In the United States, the Harry Potter series of books were often at the top of The
New York Times fiction bestseller list. These books have been marketed by turns to
preteen, teen, and adult readers around the world with creative marketing,
including different book covers. Scholastic Press, the publisher of the Harry Potter
books in the U.S., is using which of the following segmentation strategies?
A.
B.
C.
D.
E.
multiple products with one segment

one product with one channel of distribution
one product with multiple market segments
one product with changes based on customer behavior
multiple products with multiple segments
Scholastic is selling one book series (product) to multiple market segments preteen, teen, and adult readers by using different book covers and other creative
marketing techniques.

Blooms: Understand
49.
(p. 192
)
Which of the following is a disadvantage of employing a multiple products, multiple

market segments strategy if NOT implemented well?
A.
B.
C.
D.
E.
higher sales but lower profits

reduced quality and higher prices
meeting customer needs but at the expense of higher prices
lower prices but with higher production costs
higher quality but lower prices
Producing multiple products for multiple segments is clearly more expensive than
producing only a single product. But this strategy is very effective if it meets
customers' needs better, doesn't reduce quality or increase price, and adds to
sales revenues and profits. The proliferation of different products sold to multiple
segments can reduce quality and raise prices if this strategy is not well
implemented.

Blooms: Understand
Topic: Multiple products, multiple market segments
8-90
50.
(p. 192
)
Which of the following is an example of a multiple products and multiple market

segments strategy?
written content in order to appeal to different geographic markets in the U.S.
B. A new movie used several different movie trailers. One set of previews showed
the action scenes in order to attract one audience and the other set showed
romantic scenes to attract another audience.
C. Ford manufactures SUVs for those who wish to carry lots of people and pickup
trucks for those who wish to carry lots of cargo.
D. Arm and Hammer Baking Soda can be used for baking and to remove odors
from refrigerators and cat litter boxes.
remover for women.
A multiple products and multiple markets strategy has a number of distinct
products, each targeted to different types of users. Ford's SUVs and pickups are
two different types of vehicles targeted at two different groups of consumers those who wish to carry people and those who wish to carry cargo.

Blooms: Apply
8-91
51.
(p. 192
)
Which of the following is an example of a multiple products and multiple market

segments strategy?
B. A new movie used several different movie trailers. One set of previews showed
the action scenes in order to attract one audience and the other set showed
romantic scenes to attract another audience.
C. Arm and Hammer Baking Soda can be used for baking and to remove odors
from refrigerators and litter boxes.
D. Betty Crocker carries one line of cake mixes for people with conventional ovens
and another line of cake mixes for people with microwave ovens.
remover for women.
A multiple products and multiple markets strategy has a number of distinct
products, each targeted to a different type of user. Betty Crocker's two types of
cake mixes are marketed to two different groups of consumers - those with
conventional ovens and those with microwave ovens.

Blooms: Apply
52.
(p. 192
)
Kellogg's has several cereals targeted at different types of users. This is an

example of multiple products aimed at multiple markets. Manufacturing these
different cereals is clearly more expensive than producing only one but seems
worthwhile if it adds to the manufacturer's sales revenues and profits, doesn't
reduce quality or increase price, and
A.
B.
C.
D.
E.

uses the same promotion and packaging for all segments.
stabilizes competition.
better serves customers' needs.
Manufacturing multiple products for multiple market segments is worthwhile if it

serves customers' needs better, doesn't reduce quality or increase price, and adds
to the manufacturer's sales revenues and profits.

Blooms: Apply
8-92

53.
(p. 192
)

different cereals is clearly more expensive than producing one, but seems
worthwhile if it adds to the manufacturer's sales revenues and profits, serves
customers' needs better, and
A.
B.
C.
D.
E.

doesn't reduce quality or increase price.


Blooms: Apply
54.
(p. 192
)

different cereals is clearly more expensive than producing one, but seems
worthwhile if it serves customers' needs better, doesn't reduce quality or increase
price, and
A.
B.
C.
D.
E.

adds to the manufacturer's sales revenues and profits.


Blooms: Apply
8-93
55.
(p. 193
)
Tailoring products or services to the tastes of individual customers on a highvolume scale is referred to as
A.
B.
C.
D.
E.
family branding.
mass customization.
economies of scale marketing.
build-to-order.
Text term definition - mass customization. Build-to-order (BTO) is incorrect because

it involves manufacturing a product only when there is an order from a customer;
mass customization is the next step beyond build-to-order.

Blooms: Remember
Topic: Mass customization
56.
(p. 193
)
Custom Foot operates six retail locations. At first glance, none looks different from
a typical boot store. But here the only boots on hand are display models, there is
no inventory for sale and customers go home empty-handed, awaiting their orders.
Customers browse the store, choosing style, color, and leather type, with about
100 displays to provide style guidelines. Custom Foot guarantees your boots will
be ready within three weeks. This is an example of
A.
B.
C.
D.
E.
mass customization.
virtual merchandising.
Mass customization is tailoring products or services to the tastes of individual

customers on a high-volume scale - the situation here with Custom Foot.

Blooms: Apply
8-94
57.
(p. 193
)
ChoiceShirts is an online company that makes made-to-order T-shirts. Its online

customers can order their shirts using any downloaded photo inserted into 600
templates or even design a shirt from scratch. This is an example of
A.
B.
C.
D.
E.
family branding.
mass customization.
Mass customization is tailoring products or services to the tastes of individual

customers at high volumes. Alternative c (multiple products and multiple market
segments) and alternative d (one product and multiple market segments) are
incorrect because ChoiceShirts only markets to one segment: online consumers
who buy photo-supplied designer T-shirts.

Blooms: Apply
58.
(p. 193
)
MyTwinn makes dolls that look like young girls. For $119, the firm will make a doll
that looks just like a photograph. So, if you send in the money and a photo of your
young niece, she could have a doll that is her twin! This is an example of
A.
B.
C.
D.
E.
family branding.
production marketing.
mass customization.
Today's flexible manufacturing and marketing processes have made mass

customization possible, tailoring products or services to the tastes of individuals on
a high-volume scale.

Blooms: Apply
8-95
59.
(p. 193
)
Lands' End will custom fit a Marinac jacket and make it with additional features
such as thumb loops, underarm ventilation slits, and a key clip when you order
from LandsEnd.com. This is an example of
A.
B.
C.
D.
E.
family branding.
mass customization.
market melding.


Blooms: Apply
60.
(p. 193
)
Nike employs a __________ strategy at its website, nikeid.com, which allows

customers design a sneaker to their own personal specifications.
A.
B.
C.
D.
E.
product sampling
product clustering
mass customization
usage segmentation


Blooms: Apply
8-96
61.
(p. 193
)
Chip-N-Dough Cookie Company will let you select cookies and put a photo of
yourself on the tin. This is an example of
A.
B.
C.
D.
E.
mass customization.
multiple marketing.
target marketing.
product clustering.
repositioning.


Blooms: Apply
62.
(p. 193
)
Name Maker is an online company that sells high-end gift wrapping that can have
custom slogans or names printed on it, such as the name of a person celebrating a
birthday or a couple who is getting married. This made-to-order gift-wrapping is
priced from $24.95 to $32.95 per 12-foot roll. This is an example of
A.
B.
C.
D.
E.
family branding.
mass customization.


Blooms: Apply
8-97
63.
(p. 193
)
Manufacturing a product only when there is an order from a customer is referred to

as
A.
B.
C.
D.
E.
build-to-order.
Text term definition - build-to-order.

Blooms: Remember
Topic: Build-to-order
64.
(p. 193
)
Model E is a new type of car manufacturer that relies on the Internet ordering.
"Think of Model E as the Dell of the auto industry. We design just a few products
that consumers truly want, leveraging best-in-class components and micro-factory
approaches for rapid design, launch, and direct delivery," said William Santana Li,
president and CEO of Model E. Model E manufactures each car when a customer
chooses from a limited number of options and orders. Model E relies on
A.
B.
C.
D.
E.
build-to-order.
mass customization.
The comparison of the Model E to Dell is the phrase that should remove any doubt
from students' minds that this is a build-to-order business. It is very similar to
mass customization, but because of production issues, a customer does not have
the ability to specify an unlimited number of features.

Blooms: Apply
Topic: Build-to-order
8-98
65.
Organizational synergy is the increased customer value achieved through
(p. 193
)
A. performing organizational functions more efficiently.

B.
more discounts or larger rebates at the point of sale.
C. involvement of the ultimate consumer in product design.
D.
an increase in the knowledge of competitors.
E. shared ownership of the organization through publicly traded stock.
Text term definition - organizational synergy.

Blooms: Remember
Topic: Organizational synergy
66.
(p. 193
)
The increased customer value achieved through performing organizational

functions like marketing or manufacturing more efficiently is referred to as
__________.
A.
B.
C.
D.
E.
aggregation
organizational synergy
segmentation
amalgamation
valuation
Text term definition - organizational synergy.

Blooms: Remember
8-99
67.
(p. 193
)
The ultimate criterion for an organization's marketing success is that __________ as

a result of increased synergies.
A.
B.
C.
D.
E.
costs decrease
market share increases
product deficiencies decrease
customers should be better off
new products flourish
The organizational synergy increases customer value through more products,

improved quality on existing products, lower prices, improved distribution, and so
on. So, the ultimate criterion for an organization's marketing success is that
customers should be better off as a result of the increased synergies.

Blooms: Understand
68.
(p. 193
)
All of the following are examples of increased customer value from organizational
synergy EXCEPT:
A.
B.
C.
D.
E.
lower prices
increased brand awareness
more products
improved distribution
improved quality of existing products
Organizational synergy is the increased customer value achieved through

performing organizational functions such as marketing or manufacturing more
efficiently. The increased value can take many forms related to the marketing
program: more products, improved quality of existing products, lower prices,
easier access to products through improved distribution, and so on. Brand
awareness is beneficial to the firm, but not a component of customer value likely
to occur here.

Blooms: Understand
8-100
69.
(p. 193
)
When a new product or a new retail chain steals customers and sales from older
existing ones of an organization, it is referred to as
A.
B.
C.
D.
E.
cannibalization.
amortization.
product appropriation.
product pilfering.
marketing Darwinism.
Text term definition - cannibalization.

Blooms: Remember
Topic: Cannibalization
70.
(p. 193
)
When Ann Taylor, a well-known retailer of sophisticated women's clothing, started

losing sales to its own LOFT outlets that feature moderately priced casual clothes,
Ann Taylor was dealing with the marketing phenomenon known as __________.
A.
B.
C.
D.
E.
amortization
guerrilla marketing
shrinkage
marketing Darwinism
cannibalization
When a company's new product or a new chain steals customers and sales from
older existing ones, it is referred to as cannibalization.

Blooms: Understand
8-101
71.
(p. 193
)
Suppose marketers want to use product differentiation and market segmentation

strategies. What question should they ask when considering the potential for
cannibalization with these strategies?
A.
B.
C.
D.
"Will our new products steal customers or sales from our older ones?"
"Will the products compete head-to-head with those of a competitor?"
"Can this action successfully draw customers away from competitors?"
"Are there enough similarities within the market segment to warrant such high
costs?"
E. "Will this action eliminate the need for individualized advertising and
promotion?"
When the increased customer value involves adding new products or a new chain
of stores, the product differentiation-market segmentation trade-off raises a critical
issue: "Are the new products or new chain simply stealing customers and sales
from the company's older existing ones?" This is known as cannibalization.

Blooms: Understand
72.
Cannibalization would mostly likely occur if
(p. 193
)
A.
Dell adds high-end speaker systems to its line.
B.
General Mills launches Caramel Crunch Cheerios.
C. General Motors markets a motorcycle similar to the Can-Am Spyder Roadster 3wheel bike.
D.
Pillsbury adds boxed sugar to its product mix.
E. Procter & Gamble adds a new line of baby clothing to its Pamper's stable of
products.
Consumers who buy Caramel Crunch Cheerios may have chosen not to buy
MultiGrain Cheerios or Honey Nut Cheerios Medley Crunch. Thus, Chocolate
Cheerios could cannibalize sales from the other Cheerios products in the General
Mills line.

Blooms: Apply
8-102
73.
(p. 193
)
Today, marketers are increasingly emphasizing a Tiffany/Walmart strategy, which

is to offer
A. a low-priced product to a high-income or high net worth segment.

B. a high-priced product to a low-income or low net worth segment.
C. different variations of the same basic offering to high-end and low-end
segments.
D. a high-priced and a low-priced offering to a single market segment.
E.
different offerings to high-end and low-end segments.
A firm uses a Tiffany/Walmart strategy when it offers different variations of the
same basic offering to high-end and low-end segments.

Blooms: Remember
Topic: Tiffany/Walmart strategy
74.
Which of the following is an example of a Tiffany/Walmart strategy?
(p. 193
)
B. A new movie used several different movie trailers; one showed the action
scenes in order to attract one audience and the other showed romantic scenes
to attract another audience.
C. Arm and Hammer Baking Soda can be used for baking and to remove odors
from refrigerators and litter boxes.
D. Gap's Banana Republic chain sells blue jeans for $58, whereas its Old Navy
stores sell a slightly different version for $22.
remover for women.
A Tiffany/Walmart strategy is a two-tier marketing strategy. Many firms are now
offering different variations of the same basic product or service to high-end and
low-end segments sold at different retailers - the situation with Gap's Banana
Republic and Old Navy.

Blooms: Understand
8-103
75.
(p. 193
)
The Walt Disney Company carefully markets two distinct Winnie-the-Poohs; one is
the original line-drawn figure on fine china sold at Nordstrom and the other is a
cartoon-like Pooh on polyester bed sheets sold at Target. This is an example of
A.
B.
C.
D.
E.
mass customization.
psychographic market segmentation.
This is a two-tiered strategy referred to as a Tiffany/Walmart strategy. Many firms

are now offering different products or services to high-end or low-end segments
sold at different retailers.

Blooms: Apply
76.
(p. 193
)
You can go to your nearest Hallmark card store and buy a birthday greeting card
for a friend and pay $4.50. Or, you can buy a Hallmark card from its new $0.99 line
of greeting cards, made with lesser-quality materials but just as sentimental, that
are sold at Barnes and Noble bookstores. This is an example of
A.
B.
C.
D.
E.
mass customization.
organizational synergy.
This is a two-tiered strategy referred to as a Tiffany/Walmart strategy. Many firms

are now offering different products or services to high-end or low-end segments
sold at different retailers.

Blooms: Apply
8-104
77.
The purpose of the five key steps in segmenting and targeting markets is to
(p. 194
)
A. identify competitors that provide similar products that satisfy a firm's

customers' needs.
B.
provide guidance to reposition a firm's products.
C. generate new products ideas for firms that are not growing in market share.
D. link market needs of customers to the organization's marketing program.
E. correlate directly to each of the five environmental forces.
Figure 8-3 shows the five key steps in segmenting and targeting markets that link
customers' needs to the organization's marketing program.

Blooms: Understand
Learning Objective: 08-02 Identify the five steps involved in segmenting and targeting markets.
Topic: Steps in segmenting and targeting markets
78.
(p. 194
)
The first step in segmenting and targeting markets that links customer needs to
A.
B.
C. develop a market-product grid and estimate size of the overall market.
D.
E.
take marketing actions to reach target markets.
The steps in segmenting and targeting markets that link customer needs to
marketing actions are: (1) group potential buyers into segments; (2) group
products to be sold into categories; (3) develop a market-product grid and
estimate size of markets; (4) select target markets; and (5) take marketing actions
to reach target markets. See Figure 8-3.

Blooms: Understand
8-105
79.
(p. 194
)
The second step in segmenting and targeting markets that link customer needs to
A.
B. develop a market-product grid and estimate size of the overall market.
C.
D.
take marketing actions to reach target markets.
E.

Blooms: Understand
80.
(p. 194
)
The third step in segmenting and targeting markets that link customer needs to
A.
B.
C.
D.
E.

develop a market-product grid and estimate size of markets

Blooms: Understand
8-106
81.
(p. 194
)
The fourth step in segmenting and targeting markets that link customer needs to
A.
B.
C.
D. develop a market-product grid and estimate size of the overall market
E.

Blooms: Understand
82.
(p. 194
)
The fifth step in segmenting and targeting markets that link customer needs to
A.
B.
C.
D.
E. develop a market-product grid and estimate size of the overall market

Blooms: Understand
8-107
83.
(p. 194
)
There are five steps involved in segmenting and targeting markets. What should a
marketer do after he or she has grouped products to be sold into categories?
A.
B.
C.
D.
E.
create product groupings

develop a market-product grid and estimate size of markets
form prospective buyers into market segments

Blooms: Understand
84.
(p. 194
)
A marketing manager goes through several steps to put a market segmentation

plan into effect. This includes being able to form market segments and then
__________ without encountering excessive costs.
A.
B.
C.
D.
E.
eliminate potential non-buyers

identify segmentation variables
select the market segment(s) to target
redirect their purchase behaviors
ignore any and all similarities
Marketers must be able to form and then select market segments to put a market
segmentation plan into effect.

Blooms: Understand
Topic: Criteria for forming segments
8-108
85.
All of the following are criteria used for forming market segments EXCEPT:
(p. 194
-195)
A.
difference of needs of buyers among segments.
B.
potential for increased profit.
C.
D.
potential of a marketing action to reach a segment.
E. simplicity and cost-effectiveness of assigning potential buyers to segments.
The five criteria to be used in forming segments include: (1) simplicity and costeffectiveness of assigning potential buyers to segments; (2) potential for increased
profit; (3) similarity of needs of potential buyers within a segment; (4) difference of
needs of buyers among segments; and (5) potential of a marketing action to reach
a segment. The cost of reaching the segment is a criterion for selecting a target
segment.

Blooms: Understand
86.
Which of the following is a criterion used in forming market segments?
(p. 194
-195)
A.
similarity of segments to competitors' segments
B.
differences between potential suppliers or distributors
C.
differences of needs of buyers within a segment
D.
market size of the segment
E. simplicity and cost-effectiveness of assigning potential buyers to segments
The five criteria to be used in forming segments include: (1) simplicity and costeffectiveness of assigning potential buyers to segments; (2) potential for increased
profit; (3) similarity of needs of potential buyers within a segment; (4) difference of
needs of buyers among segments; and (5) potential of a marketing action to reach
a segment.

Blooms: Understand
8-109
87.
The best segmentation approach is the one that
(p. 194
)
A.
makes it easiest to reach the segment.
B.
maximizes the opportunity for future profit and ROI.
C. recognizes different needs of buyers among different segments.
D. recognizes similarities of needs of potential buyers within a segment.
E. is simplest and least costly in assigning potential buyers to segments.
The best segmentation approach is the one that maximizes the opportunity for
future profit and ROI. If this potential is maximized without segmentation, don't
segment.

Blooms: Understand
88.
Which of the following is NOT a reason to segment a market?
(p. 194
-195)
A. The ability to assign buyers to a segment is simple and cost-effective.

B.
It would cause an increase in market share or profit.
C. All the buyers in the entire market have similar wants and needs.
D.
There is a potential marketing action to reach it.
E. There are different wants and needs of buyers in the entire market.
You would not break a market into segments if all the buyers within it have similar
wants and needs. The other alternatives are all reasons to form a segment.

Blooms: Understand
8-110
89.
Which of the following is NOT a criterion to use in forming market segments?
(p. 194
-195)
A. The ability to assign buyers to a segment is cost-effective and simple.

B. The result of segmenting will cause an increase in market share or profit.
C. There are significant similarities among buyers in the market segment.
D. There is a potential marketing action to reach the segment.
E. The cost to reach the segment exceeds its profitability.
The cost to reach the segment is a criterion to select a segment. The other
alternatives are all criteria to form a segment.

Blooms: Understand
90.
(p. 194
-195)
Selling a product to a different market segment usually requires a different

marketing action that in turn means greater costs. If increased revenues don't
offset extra costs of this action, a marketer should __________.
A.
B.
C.
D.
E.
increase the advertising budget

prune the product offerings
family brand their products
combine segments
group products into categories
If the needs of the various segments aren't very different, combine them into
fewer segments. A different segment usually requires a different marketing action
that, in turn, means greater costs. If increased sales don't offset extra costs,
combine segments to reduce the number and total costs of marketing actions.

Blooms: Understand
8-111
91.
(p. 194
-195)
Criteria for forming segments involve both similarities and differences. In terms of
the needs of buyers, the similarities must be __________ a segment, and the
differences must be __________ segments.
A.
B.
C.
D.
E.
between; among
throughout; absent in
within; among
absent in; throughout
among; across
Two criteria used in forming segments answer this question: similarity of needs of
potential buyers within a segment and difference of needs of buyers among
segments.

Blooms: Understand
92.
(p. 194
-195)
Criteria for forming segments involve both similarities and differences. Which of
the following statements is most accurate?
A. Within a segment, the needs of potential buyers should be different; among

segments, the needs of buyers should be similar.
B. Within a segment, the needs of potential buyers should be similar; among
segments, the needs of buyers should be different.
C. The needs of buyers should be different, both between segments and within
segments.
D. The needs of buyers should be the same, both between segments and within
segments.
E. If there are any differences at all, you should forgo any segmentation.
Two criteria used in forming segments answer this question: similarity of needs of
potential buyers within a segment and difference of needs of buyers among
segments.

Blooms: Understand
8-112
93.
(p. 194
-195)
Grouping potential buyers into meaningful segments involves meeting some

specific criteria that answer the following question:
A.
B.
C.
D.
E.
"Is this product useful on a global scale?"

"Is it possible to reposition this product?"
"Is there too much competition for this product?"
"Is the market loyal to the product?"
"Would segmentation be worth doing and is it possible?"
It's not always a good idea to segment a market. Grouping potential buyers into
meaningful segments involves answering the two-part question, "Would
segmentation be worth doing, and is it possible?"

Blooms: Understand
94.
(p. 194
-195)
About 3 percent of the population has some degree of allergic reaction, usually
mild, to preservatives used in salad bars. Restaurants might consider people with
these allergies as a separate segment. To implement this segmentation strategy,
restaurants would have to prepare a regular salad bar and a special salad bar for
the allergies segment. This multiple product and multiple market segment strategy
would have the greatest difficulty meeting which of the following criteria used to
form market segments?
A.
different needs of buyers among different segments
C. simplicity and cost-effectiveness of assigning potential buyers to segments
D.
potential for increased profit and ROI
E.
The allergies market segment would probably not provide sufficient profit and ROI
given its small estimated size, the limited benefit to consumers in the segment,
and the high cost of running a duplicate salad bar. Bottom line: The cost probably
exceeds the profits gained.

Blooms: Apply
8-113
95.
(p. 194
-195)
Four general categories used to segment consumer markets are geographic

segmentation, demographic segmentation, __________, and behavioral
segmentation.
A.
B.
C.
D.
E.
supplier segmentation
demand segmentation
regional segmentation
Figure 8-4 shows four general bases of segmentation for consumer markets and
the typical variables that can be used to segment U.S. consumer markets: (1)
geographic segmentation; (2) demographic segmentation; (3) psychographic
segmentation; and (4) behavioral segmentation.

Blooms: Understand
Learning Objective: 08-03 Recognize the bases used to segment consumer and organizational (business)
markets.
Topic: Consumer segmentation variables
96.
Segmentation based on where prospective customers live or work is referred to as
(p. 195
)
A.
B.
C.
D.
E.
zip code segmentation.

regional segmentation.
MSA segmentation.
NAICS code segmentation.
Text term definition - geographic segmentation.

Blooms: Remember
markets.
Topic: Geographic segmentation
8-114
97.
Region and city size are both variables used to employ __________ segmentation.
(p. 195
)
A.
B.
C.
D.
E.
geographic
behavioral
district
psychographic
demographic
Geographic segmentation is based on based on where prospective customers live

or work. Geographic segmentation variables include region, city size, statistical
area, media-television, and density.

Blooms: Understand
markets.
98.
(p. 195
)
Campbell's Soup Company found that its canned nacho cheese sauce, which could
be heated and poured directly onto nacho chips, was too spicy for Americans in
the East and not spicy enough for those in the West and Southwest. Today,
Campbell's plants in Texas and California produce a spicier nacho cheese sauce
than what is produced in the other plants. Campbell's is using __________
segmentation.
A.
B.
C.
D.
E.
demographic
behavioral
economic
geographic
psychographic
Campbell's is marketing a different sauce to different markets depending on where

they are located. This is geographic segmentation.

Blooms: Understand
markets.
8-115
99.
Which of the following statements best illustrates geographic segmentation?
(p. 195
)
A. GE builds a downsized microwave oven to hang under kitchen cabinets.

B. Del Monte offers a line of canned fruit with no added sugar or artificial
sweeteners.
C. In China, KFC sells a spicier chicken the farther away its restaurants are from
the coastal areas.
D. A fast food hamburger restaurant is only open for breakfast on weekdays and
KFC has discovered that to be a successful global marketer, it must be willing to
adapt to the taste preferences of different geographic regions.

Blooms: Apply
markets.
100. Universal Concerts wants to bring a series of music concerts to Canada next year.
(p. 195 In general, Western Canadians prefer country music while Eastern Canadians
)
prefer rock. In fact, a country music event in eastern Canada is very likely to have
lots of empty seats. To maximize revenue, Universal Concerts should segment its
Canadian market according to __________.
A.
B.
C.
D.
E.
geographic characteristics
music format characteristics
behavioral characteristics
Western Canadians prefer country music much more than do Eastern Canadians.
To avoid losses on country music concerts in the east, Universal Concerts should
use geographic characteristics in deciding where to hold a successful country
music concert.

Blooms: Apply
markets.
8-116
101. Variables that are based on some objective physical (gender, ethnicity),
(p. 195 measurable (age, income), or other classification attribute (occupation) of
)
prospective customers are used in which segmentation base?
A.
B.
C.
D.
E.
personality
usage
needs
demographic
behavioral
Text term definition - demographic segmentation.

Blooms: Remember
markets.
Topic: Demographic segmentation
102. Which of the following is a consumer demographic segmentation variable?

(p. 195
)
A.
B.
C.
D.
E.
personality
gender
usage rate
needs
region
Demographic segmentation is based on some objective physical (gender, race),

measurable (age, income), or other classification attribute (birth era, occupation)
of prospective customers.

Blooms: Understand
markets.
8-117
103. More than half of all U.S. households are composed of only one or two persons, so
(p. 195 Aunt Jemima offers one serving meals - such as its Ham & Egg Scramble and
)
Oatmeal Pancakes. Aunt Jemima is using __________ as the basis to segment its
market.
A.
B.
C.
D.
E.
usage rates
usage patterns
behavior characteristics
The number of people in a household is a demographic characteristic that Aunt

Jemima uses to segment the market.

Blooms: Apply
markets.
104. Procter & Gamble (P&G) decided to skip a generation of consumers when it began
(p. 195 to market Old Spice deodorant. The target market consists of men aged 18 to 34
)
years old (Generation Y) who don't remember the Old Spice brand sold to their
grandfathers (pre baby boomer) many years ago. P&G is using which type of
A.
B.
C.
D.
E.
behavioral
demographic
lifestyle
geographic
psychographic
Birth era (based on age) is a demographic segmentation variable.

Blooms: Apply
markets.
8-118
105. When a telemarketer calls to sell a consumer life insurance, the last questions
(p. 195 asked is what category does the person's household income falls into (less than
)
$50,000; $50,000 to $99,999; and $100,000 and over). When the telemarketer
asks about household income, this indicates the use of which type of consumer
variable the firm is using to segment its market?
A.
B.
C.
D.
E.
usage
behavior
demographic
buying situation
psychographic
Household income is a demographic variable.

Blooms: Apply
markets.
106. The State of Alabama Board of Tourism ran a series of ads showing traditional
(p. 195 families enjoying various attractions in the state. Since the apparent target of
)
these ads is the traditional family, it appears that the State of Alabama Board of
Tourism has segmented the market using __________ variables.
A.
B.
C.
D.
E.
demographic
regional
socioeconomic
geographic
psychographic
Marital status, life stage, and household/family size are demographic variables.

Blooms: Apply
markets.
8-119
107. Which of the following statements demonstrate the formation of a segment based
(p. 195 on household size?
)
A. Campbell's makes a spicier nacho cheese sauce for its distributors in Texas than
it does in Maine.
B. GE built a downsized microwave oven to hang under kitchen cabinets.
C. Del Monte offers a line of canned fruit with no added sugar or artificial
sweeteners.
D. A fast-food hamburger restaurant is only open for breakfast on weekdays and
Household size is a demographic customer characteristic. Because smaller
households need to cook less food, GE downsized its microwave oven and restyled
it to hang under cabinets.

Blooms: Apply
markets.
108. At a Hallmark store you can find several lines of greeting cards, including Fresh
(p. 195 Ink, Nature's Sketchbook, Shoebox, Maxine, Mahogany, and Tree of Life cards - all
)
made by Hallmark for sale in its stores and intended to appeal to different target
markets. The Mahogany line is designed to appeal to African-Americans. This is an
example of __________ segmentation.
A.
B.
C.
D.
E.
regional
lifestyle
demographic
geographic
psychographic
Race/ethnicity is a demographic segmentation variable.

Blooms: Apply
markets.
8-120
109. Which of the following statements regarding segmentation bases is most

(p. 195 accurate?
)
A. The identification of demographic variables is more objective than the

identification of psychographic variables, which is more subjective.
B. Marketers should use segmentation bases in this order to reduce potential
costs: behavioral, demographic, psychographic, and geographic.
C. The identification of psychographic variables is more objective than the
identification of demographic variables, which is more subjective.
D. Behavioral segmentation is based primarily on personality.
E. Psychographic segmentation is based primarily on product features.
Demographic segmentation is based on some objective physical (gender, race),
measurable (age, income) or other classification attribute (birth era, occupation) of
prospective customers. Psychographic segmentation is based on some subjective
mental or emotional attributes (personality, aspirations, lifestyle) or needs of
prospective customers.

Blooms: Understand
markets.
110. Segmentation based on some subjective mental or emotional attributes,

(p. 195 aspirations, or needs of prospective customers is referred to as
)
A.
B.
C.
D.
E.
affective segmentation.
psychosocial segmentation.
Text term definition - psychographic segmentation.

Blooms: Remember
markets.
Topic: Psychographic segmentation
8-121
111. All of the following are psychographic segmentation variables EXCEPT:

(p. 195
)
A.
B.
C.
D.
E.
lifestyle
needs
birth era
PRIZM
personality
Psychographic segmentation is based on some subjective mental or emotional

attributes (personality), aspirations (lifestyle), or needs of prospective customers.
PRIZM is Nielsen's proprietary lifestyle segmentation system. Birth era is a
demographic segmentation variable.

Blooms: Understand
markets.
112. Personality and lifestyle are both variables used to employ __________
(p. 195 segmentation.
)
A.
B.
C.
D.
E.
geographic
behavioral
attitudinal
psychographic
demographic


Blooms: Understand
markets.
8-122
113. Magazines like Fitness, Field & Stream, Golf Digest, and Health focus on how
(p. 195 people live their lives, and thus all use a __________ segmentation strategy.
)
A.
B.
C.
D.
E.
psychographic
behavioral
situational
socioeconomic
geographic
Lifestyle is a psychographic variable. These magazines are designed to appeal to

people who enjoy certain lifestyles.

Blooms: Apply
markets.
114. The Nielsen PRIZM lifestyle segmentation is based on the belief that "birds of a
(p. 195 feather flock together." This type of consumer segmentation is referred to as
)
A.
B.
C.
D.
E.
situational segmentation.

Nielsen PRIZM uses the lifestyle segmentation variable, a type of psychographic
segmentation.

Blooms: Understand
markets.
Topic: Marketing matters: Nielsen PRIZM
8-123
115. Nielsen PRIZM segmentation classifies every household into one of 66

(p. 195 demographically and __________ distinct neighborhood segments to identify
)
lifestyles and purchase behavior within a defined geographic market area, such as
zip code.
A.
B.
C.
D.
E.
financially
behaviorally
ethnically
socially
ethnographically
Nielsen PRIZM uses lifestyle segmentation, and classifies every household into one
of 66 demographically and behaviorally distinct neighborhood segments to identify
lifestyles and purchase behavior within a defined geographic market, such as zip
code.

Blooms: Understand
markets.
Topic: Marketing matters: Nielsen PRIZM
116. Segmentation based on some observable actions or attitudes by prospective

(p. 195 customers, such as what benefits they seek, as well as where, how frequently, and
)
why they buy, is referred to as
A.
B.
C.
D.
E.
Text term definition - behavioral segmentation.

Blooms: Remember
markets.
Topic: Behavioral segmentation
8-124
117. Segmentation based on what product features are important to different

(p. 195 customers is known as
)
A.
B.
C.
D.
E.
Understanding what features are important to different customers (behavioral

segmentation) is a useful way to segment markets because it can lead directly to
specific marketing actions, such as a new product, an ad campaign, or a
distribution system.

Blooms: Understand
markets.
118. Product features and usage rate are both variables used to employ __________
(p. 195 segmentation.
)
A.
B.
C.
D.
E.
geographic
demographic
loyalty
psychographic
behavioral
Behavioral segmentation is based on some observable actions or attitudes by

prospective customers - such as where they buy, what benefits they seek, how
frequently they buy, and why they buy. Examples of behavioral segmentation
variables include product features and usage rate.

Blooms: Understand
markets.
8-125
119. Behavioral segmentation may be based on

(p. 195
)
A.
B.
C.
D.
E.
lifestyles and demographics.

retailer and wholesaler behaviors.
geographic and demographic criteria.
product features and retail store type.
demand and supply.
Behavioral segmentation is based on observable actions or attitudes of

prospective customers, such as where they buy, what benefits they seek, how
variables include product features and retail store type.

Blooms: Understand
markets.
120. A national car rental firm targets 50 percent of its advertising to salespeople who
(p. 195 rent a car over 40 weeks per year. The company is using __________ segmentation.
)
A.
B.
C.
D.
E.
geographic
demographic
loyalty
psychographic
behavioral
Usage rate and user status are both behavioral segmentation variables. In this
case, salespersons who rent a car are "users" and "over 40 weeks per year" is a
measure of usage rate.

Blooms: Apply
markets.
8-126
121. College dorm residents frequently want to keep and prepare their own food and
(p. 195 snacks to save money or have a late night snack. However, their dorm rooms are
)
often woefully short of space. MicroFridge marketers understand this and offer a
combination microwave, refrigerator, and freezer targeted to these students.
MicroFridge is most likely using which basis of segmentation?
A.
B.
C.
D.
E.
sociocultural segmentation
Understanding what product features are important to different customers

(behavioral segmentation) is a useful way to segment markets because it can lead
directly to specific marketing actions, such as a new product, an ad campaign, or a
distribution system.

Blooms: Understand
markets.
122. Samsung sells a variety of TVs, from simple and small ones to large smart TVs with
(p. 195 Internet connectivity and 3D technology. Customers prefer different features, so
)
Samsung uses which type of segmentation variable based on their viewing
preferences?
A.
B.
C.
D.
E.
Understanding what product features are important to different customers

(behavioral segmentation) is a useful way to segment markets because it can lead
directly to specific marketing actions. Samsung uses behavioral segmentation to
guide the types of TVs it sells since different consumers seek different product
features/benefits in a TV.

Blooms: Apply
markets.
8-127

123. Potluck participants bring a variety of dishes to share with family, friends, or
(p. 195 coworkers at these events, but it is easy to forget to take the bowl that you
)
brought home with you. Reynolds responded to this problem by creating PotLux
cookware, attractive and inexpensive disposable dishes for transporting food.
Reynolds is using __________ segmentation here.
A.
B.
C.
D.
E.
psychographic
behavioral
demographic
social
geographic
Reynolds uses behavioral segmentation based on the product features/benefits

prospective customers seek - cookware that is disposable and can be left behind.

Blooms: Apply
markets.
124. Many companies have cut travel budgets so that very few business people are
(p. 195 authorized to fly first class. Despite the shrinking pool of business-class travelers,
)
British Airways has grown market share for its transatlantic business class by
offering greater comfort. Promotions to frequent fliers stress that passengers can
sleep in fully reclining seats and arrive refreshed to carry out a full day's schedule.
The segmentation strategy of British Airways is an example of
A.
B.
C.
D.
E.
life stage segmentation.

lifestyle segmentation.
social class segmentation.
British Airways is using behavioral segmentation (benefits the prospective

customers seek) to sell airline tickets to frequent fliers who value comfort and wish
to sleep on a transatlantic flight.

Blooms: Apply
markets.
8-128

125. ExxonMobil targets consumers that fill up their gas tanks more than once a week
(p. 195 with its Chase Visa fuel card. In this example, ExxonMobil is using which
)
A.
B.
C.
D.
E.
needs
lifestyle
behavioral
psychographic
demographic
Behavioral segmentation is based on some observable actions or attitudes by

prospective customers - such as where they buy, what benefits they seek, how
variables include product features and usage rate.

Blooms: Apply
markets.
126. The quantity consumed or patronage (store visits) during a specific period is
(p. 196 referred to as
)
A.
B.
C.
D.
E.
usage rate.
purchase metric.
consumption index.
consumption rate.
demand amount.
Key term definition - usage rate.

Blooms: Remember
markets.
Topic: Usage rate
8-129
127. Usage rate refers to

(p. 196
)
A. the percentage of total possible users divided by the total number of

consumers who actually use a product or service.
B. the number of times a customer uses or recommends a product or service
annually.
C. quantity consumed or patronage (store visits) during a specific period.
D. the maximum number of times a customer has used a product or service
historically.
E. the profits a firm earns from customers who consume a particular product or
service.
Key term definition - usage rate.

Blooms: Remember
markets.
Topic: Usage rate
128. Alamo, a car rental firm, targets 50 percent of its advertising to salespeople who
(p. 196 rent a car over 40 weeks per year. Alamo likely segments its market by
)
A.
B.
C.
D.
E.
usage rate.
benefits offered.
demographics.
geography.
lifestyle.
In this case, rate of use is defined as "over 40 weeks per year." Therefore, Alamo
uses behavioral segmentation as the basis and usage rate as the segmentation
variable.

Blooms: Apply
markets.
Topic: Usage rate
8-130
129. Frequency marketing is a strategy that focuses on

(p. 196
)
A.
B.
C.
D.
E.
demographics.
benefits offered.
usage rate.
geography.
lifestyle.
Text term definition - frequency marketing.

Blooms: Remember
markets.
Topic: Frequency marketing
130. The market segmentation strategy known as frequency marketing focuses on

(p. 196
)
A.
trial.
B. the average number of times a person in the target audience is exposed to an
advertisement.
C.
consumption preferences.
D.
turnover.
E.
usage rate.
Text term definition - frequency marketing.

Blooms: Remember
markets.
8-131
131. Airlines have developed frequent-flier programs to encourage passengers to use

(p. 196 the same airline repeatedly. This marketing strategy is based on
)
A.
B.
C.
D.
E.
buying condition segmentation.
Airlines have developed frequent-flier programs to encourage passengers to use

the same airline repeatedly to create loyal customers. This technique, sometimes
called frequency marketing, is a strategy that focuses on usage rate, a type of

Blooms: Understand
markets.
132. Airline programs that encourage passengers to repeatedly use the same airline
(p. 196 focus on usage rate and employ a __________ strategy.
)
A.
B.
C.
D.
E.
rate of recurrence
product utilization
incidence
frequency marketing
consumption index
Airlines have developed frequent-flier programs to encourage passengers to use

the same airline repeatedly to create loyal customers. This technique, sometimes
called frequency marketing, is a strategy that focuses on usage rate.

Blooms: Understand
markets.
8-132
133. A recent study by the Aberdeen Group analyzed which segmentation bases were
(p. 196 used by the 20 percent most profitable organizations of the 220 surveyed. Which
)
segmentation base did these organizations use the most?
A.
B.
C.
D.
E.
behavioral
psychographic
geographic
demographic
product
A recent study by the Aberdeen Group analyzed which segmentation bases were
used by the 20 percent most profitable organizations of the 220 surveyed. From
highest to lowest, the segmentation bases were: geographic (88 percent),
behavioral (65 percent), demographic (53 percent), and psychographic (43
percent).

Blooms: Understand
markets.
Topic: Segmentation bases
134. The 80/20 rule suggests that

(p. 196
)
A. 80 percent of a firm's inventory should be readily available while 20 percent

should be reserved for emergency demand.
B. 80 percent of a firm's first-time users will become brand loyal while 20 percent
will use the product only once and then abandon it.
C. 80 percent of a firm's sales are obtained from 20 percent of its customers.
D. 80 percent of a firm's marketing program expenses are tax deductible while 20
percent are not.
E. 80 percent of a firm's products will be sold to ultimate consumers while 20
percent to organizational buyers.
Key term definition - 80/20 rule.

Blooms: Remember
markets.
Topic: 80/20 rule
8-133
135. The 80/20 rule is most closely related to which basis of segmentation?
(p. 196
)
A.
B.
C.
D.
E.
geographic
psychographic
opportunistic
demographic
behavioral
The 80/20 rule is a concept that suggests 80 percent of a firm's sales are obtained
from 20 percent of its customers and relates to usage rates, which is a behavioral
segmentation variable.

Blooms: Understand
markets.
Topic: 80/20 rule
136. Todd Harris and Associates, a New York sales promotion agency, discovered from
(p. 196 an analysis of its files that one-quarter (or 25 percent) of its clients generated
)
more than three-quarters (or 75 percent) of its fees and commissions. This is an
example of what classic concept?
A.
B.
C.
D.
E.
the two quarter gap

the 80/20 rule
the law of usage
the 75/25 exchange
Paul's Law
The 80/20 rule is a concept that suggests 80 percent of a firm's sales are obtained
from 20 percent of its customers. The percentages in the 80/20 rule are not really
fixed at exactly 80 percent and 20 percent but suggest that a small fraction of
customers provides a large fraction of a firm's sales.

Blooms: Apply
markets.
Topic: 80/20 rule
8-134
Figure 8-4
137. To the owner of a Wendy's fast food restaurant, the information in Figure 8-4 above
(p. 197 suggests that Wendy's prospects are __________ of the total compared to __________
)
for McDonald's.
A.
B.
C.
D.
E.
57.0
15.2
14.6
15.2
57.0
percent,
percent,
percent,
percent,
percent,
51.0
40.5
14.6
19.0
26.0
percent
percent
percent
percent
percent
Figure 8-4 shows that 57.0 percent of respondents are Wendy's prospects, while
26.0 percent are McDonald's prospects. See Figure 8-4.

Blooms: Understand
markets.
Topic: Fast-food restaurant patronage
8-135
138. For an owner of a Wendy's fast-food restaurant, the information in Figure 8-4 above
(p. 197 suggests
)
A. Wendy's has an advantage over both McDonald's and Burger King as being the
most preferred "second choice" restaurant.
C. a need to devise a marketing program to win customers from McDonald's and
Burger King.
D. McDonald's has fewer "exclusively loyal" customers than does Wendy's.
E.
Burger King is closing in on your market share.
The Wendy's bar in Figure 8-4 shows that its primary user segments are somewhat
behind Burger King and far behind McDonald's, so a natural strategy is to look at
these two competitors and devise a marketing program to win customers from
them. See Figure 8-4.

Blooms: Apply
markets.
139. To the owner of a Wendy's fast-food restaurant, the information in Figure 8-4 above
(p. 197 suggests
)
A. new menu items or promotional strategies may be needed to convert prospects

into users.
C. McDonald's has fewer "exclusively loyal" customers than does Wendy's.
D.
Burger King is closing in on your market share.
E. a need to devise a marketing program to change the minds of nonprospects.
The 57.0 percent of the Wendy's bar shown as prospects may be worth some indepth thought. These adults use the product category (fast food) but do not yet go
to Wendy's. New menu items or promotional strategies may succeed in converting
these prospects into users that patronize Wendy's. See Figure 8-4.

Blooms: Apply
markets.
8-136
140. As an owner of a Wendy's fast-food restaurant located near a large urban

(p. 196 university, you need to analyze your customers and determine which
)
segmentation base and its associated variable(s) you will use to segment your
target market. Which segmentation base and associated variable (s) should you
use?
A.
psychographic: VALS and personality
B.
demographic: gender and age
C.
behavioral: students and nonstudents
D.
geographic: city size and zip code
E. transportation mode: car, bike, public transportation, and none (walking)
To analyze your Wendy's customers, you need to identify which variables to use to
segment them. Because the restaurant is located near a large urban university,
the most logical starting point for segmentation is really behavioral: Are the
prospective customers students or nonstudents?

Blooms: Understand
markets.
141. Which of the following is a basis used to segment U.S. organizational markets?
(p. 197
-198)
A.
B.
C.
D.
E.
geographic
psychographic
income
prospects
education
The segmentation bases for U.S. organizational markets, which include

geographic, demographic, and behavioral.

Blooms: Understand
markets.
Topic: Organizational market segmentation
8-137
142. Variables such as location, the North American Industry Classification System
(p. 197 (NAICS) code, and number of employees are all examples of ways to
-198)
A.
B.
C.
D.
E.
differentiate products.
forecast sales to a consumer market.
segment an organizational market.
promote NAFTA.
segment a consumer market.
Variables for segmenting organizational markets include geographic (location),

demographic NAICS code), and demographic (number of employees) segmentation
bases.

Blooms: Understand
markets.
143. Which of the following statements about market segmentation for organizational
(p. 197 markets is most accurate?
-198)
A. Criteria for segmenting markets are the same whether the market is composed
of consumers or organizations.
B. Both consumer markets and organizational markets use demographic,
geographic, and behavioral bases to segment markets.
C. Psychographic criteria are just as important in segmenting organizational
markets as they are in segmenting consumer markets.
D. Consumer markets use market segmentation criteria while organizational
markets do not.
E. The greatest difference in market segmentation strategies between consumer
and organizational markets is the number of employees employed in the
segmentation process.
Variables for segmenting organizational markets include geographic (location),
demographic (NAICS code, number of employees), and behavioral (usage rate)
segmentation bases. These bases are also used to segment consumer markets,
though the variables themselves may differ.

Blooms: Understand
markets.
8-138
144. Evergreen Air Center in Marana, Arizona, is the world's biggest parking lot for
(p. 197 unwanted commercial aircraft. Airlines pay from $750 to $5,000 a month for its
-198)
storage service. The warm, dry air where the operation is located serves as a
cheap and effective airplane preservative. Which segmentation variable might
Evergreen use to segment the market?
A.
B.
C.
D.
E.
NAICS sector, such as manufacturers, or retailers, or lawyers

number of locations
who buys, such as individual buyer or buying groups
metropolitan statistical area
number of employees
The NAICS sector variable in the demographics segmentation base would reveal
other companies that fly commercial aircraft in industries that already use
Evergreen's services and which might be potential customers.

Blooms: Apply
markets.
145. The William Morris Agency represents country singer Trace Adkins in negotiations
(p. 197 with various venues in which he could perform. Imagine that the agency decided
-198)
the singer would not perform at venues located in small town communities that
have less than 100,000 people. Thus, the agency is using __________
segmentation.
A.
B.
C.
D.
E.
entertainment
psychographic
geographic
usage rate
behavioral
Population density is a geographic variable that includes whether the area is

urban, suburban, small town, or rural.

Blooms: Apply
markets.
8-139
146. Australia-based Renewable Energy Ltd. sells a $10 million device that converts
(p. 197 manure into energy. One of these devices is capable of generating energy equal to
-198)
$2 million of natural gas per year. The company believes its target market consists
of businesses similar to its first customer, a fertilizer manufacturer that was
located in a rural area. If the firm expands to the United States, it most likely will
use which of the following strategies to segment its market?
A.
B.
C.
D.
E.
behavioral and geographic

number of employees and behavioral
purchase location and purchase type
NAICS code and geographic
behavioral and NAICS code
Renewable Energy would first use the NAICS code to locate other fertilizer
manufacturers and then use geographic segmentation to find prospects located in
rural areas in the U.S. where there is a ready supply of manure.

Blooms: Apply
markets.
147. If Wendy's customers are buying an eating experience, which of the following
(p. 198 rationales would make the most sense if you were to group the products Wendy's
)
sells?
A.
B.
C.
D.
E.
grouping by caloric intake

grouping by price
grouping by meal occasion
grouping by usage rate
grouping by level of uniqueness
Wendy's customers really buy an eating experience, a meal occasion that satisfies
a need at a particular time of day. So, the product grouping that makes the most
marketing sense is by meal or time of day.

Blooms: Understand
markets.
Topic: Product groupings
8-140
148. Grocery retailer Safeway displays the thousands of items it sells in aisles
(p. 198 containing related items or product groupings. Examples would be the pet food
)
aisle or the soft drink aisle. Why would Safeway display and sell product groupings
in this manner?
A. The groupings increase the number of market-product combinations on the

market-product grid, which makes it a more manageable framework for
subsequent analysis.
B. This form of product groupings makes it easier for customers to get in and out
of the store more quickly, creating time utility.
C. The products are grouped so people can relate to them in a more meaningful
way when they shop.
D. Product groupings can be generated quantitatively to show which adhere to the
80/20 rule.
E. Suppliers get preferential treatment based upon the number of different UPCs
they provide.
Finding a means of grouping the products a firm sells into meaningful categories is
as important as forming customers into segments. If the firm has only one product,
this isn't a problem. But when it has dozens or hundreds, these must be grouped in
a way that buyers can relate to them.

Blooms: Apply
markets.
8-141
149. Hallmark placed its scrapbook supplies, photo albums, and related supplies into
(p. 198 one product group because
)
A. it was easier to forecast future sales since there were fewer market-product
combinations.
B. customers could buy in quantity and take advantage of quantity discounts.
C. their suppliers provided free displays and shelving to highlight Hallmark's
products.
D. it helped buyers relate to the products and make decisions in a more
meaningful way.
E. it allowed customers to compare price and quality with competitors who
displayed their products in a similar manner.
Finding a means of grouping the products a firm sells into meaningful categories is
as important as forming customers into segments. If the firm has only one product,
this isn't a problem. But when it has dozens or hundreds, these must be grouped in
a way that buyers can relate to them.

Blooms: Apply
markets.
150. A market-product grid is a framework to relate

(p. 199
)
A.
B.
C.
D.
total estimated expenses for each product sold to each market segment.
total anticipated revenue for each product-market segment combination.
total anticipated profit for each product sold to each market segment.
the market segments of current buyers to relative market share compared to
the largest competitor.

Blooms: Remember
marketing actions.
8-142
151. A market-product grid is a framework to relate the __________ to products offered or

(p. 199 potential marketing actions by an organization.
)
A.
B.
C.
D.
E.



Blooms: Remember
marketing actions.
152. A market-product grid is a framework to relate the market segments of potential

(p. 199 buyers to
)
A.
C.
D.
E.

Blooms: Remember
marketing actions.
8-143
153. Each cell of the complete market-product grid shows the __________.
(p. 199
)
A.
B.
C.
D.
E.
relative market share

estimated market size
investment required to reach the market
market growth rate
estimated profit
Developing a market-product grid means identifying and labeling the markets (or
horizontal rows) and product groupings (vertical columns). Each cell in the grid can
show the estimated market size of a given product sold to a specific market
segment. See Figure 8-6.

Blooms: Understand
marketing actions.
154. After establishing the market segments and product groupings on a market(p. 199 product grid, the next step is to
)
A. fill in the appropriate cells with precise statistical data from primary and/or
secondary sources.
B. estimate, with intelligent guesstimates as necessary, the market size for each
cell using a simple scale, such as from zero to three.
C. total the vertical columns to identify the greatest marketing synergies and
efficiencies.
D. total the horizontal rows to identify greatest operations/production synergies
and efficiencies.
E. identify a marketing action for every product-market combination in the grid.
horizontal rows) and product groupings (vertical columns). The next step is to
estimate the market size of each cell. The market size estimates in Figure 8-6 vary
from a large market (3) to no market at all (0) for each cell in the market-product
grid.

Blooms: Understand
marketing actions.
8-144
155. One advantage of a market-product grid is that it can be used to

(p. 200
)
A. make cost-cutting decisions under conditions of uncertainty.

B. screen many new product ideas in order to select the one with the best longrun market potential.
C. determine which target market segments to select and which product
groupings to offer.
D. select representative samples of consumers for marketing research studies.
E.
relate the product life cycle to consumer demand.
A market-product grid is a framework to relate the segments of a market to the
products offered. It is helpful in determining which target market segments to
select and which product groupings to offer.

Blooms: Understand
marketing actions.
156. Determining the size of specific markets within a market-product grid is helpful in
(p. 200 determining which target market segments to select and
)
A.
B.
C.
D.
E.
how to implement the 80-20 rule.

which products to group into meaningful categories.
how to implement a harvesting strategy.
which product groupings to offer.
which products to reposition.
Even crude estimates of the size of specific market-product combinations using a

market-product grid are helpful in determining which target market segments to
select and which product groupings to offer.

Blooms: Understand
marketing actions.
8-145
Figure 8-6
157. Figure 8-6 above shows the market-product grid for a Wendy's restaurant next to a
(p. 200 large urban university campus. The best way to describe how the student market
)
is segmented is
A.
whether the student is a faculty or staff member.
B. whether the student lives near the campus or far away.
C. whether the student has the disposable income to eat at Wendy's.
D. combining the factors of where the student lives and when (s)he is on campus.
E.
the meals eaten at the Wendy's restaurant.
The method of segmenting the student market combines where they live if they
are not commuters (dormitory or apartment) and when they are on campus if they
are commuters (day or night). See Figure 8-6.

Blooms: Understand
marketing actions.
Topic: Wendy's market-product grid
8-146
(p. 200 large urban university campus. Assume a large market (shown by a 3) is three
)
times the size of a small market (shown by a 1) and a medium market (shown by a
2) is twice the size of a small market. The meal occasion (product grouping) that
comprises the largest product grouping is
A.
B.
C.
D.
E.
breakfast.
lunch.
between-meal snack.
dinner.
after-dinner snack.
Totaling the meal columns vertically shows the "lunch" meal occasion to have the
most "units" of sales (14) of the five product grouping columns. See Figure 8-6.

Blooms: Understand
marketing actions.
(p. 200 large urban university campus. Assume a large market (shown by a 3) is three
)
times the size of a small market (shown by a 1) and a medium market (shown by a
2) is twice the size of a small market. The largest potential market segment
consists of
A.
B.
C.
D.
E.
students that live in a dormitory.

students that live in an apartment.
students that are day commuters.
students that are night commuters.
faculty or staff members.
Totaling the market segment rows horizontally shows that students living in an
apartment is the largest segment with 9 "units" of sales of the student market
segments. See Figure 8-6.

Blooms: Understand
marketing actions.
8-147
160. All of the following are criterion used for selecting target market segments
(p. 200 EXCEPT:
-201)
A.
B.
C.
D.
E.
compatibility with the organization's objectives and resources.

market size.
simplicity and cost of assigning potential buyers to segments.
competitive position.
The five criteria used for selecting a target segment include: (1) market size; (2)
expected growth; (3) competitive position; (4) cost of reaching the segment; and
(5) compatibility with the organization's objectives and resources. Simplicity and
cost of assigning potential buyers is a criterion used in forming market segments.

Blooms: Understand
marketing actions.
Topic: Criteria for selecting segments
161. Which of the following is a criterion used for selecting a target market?
(p. 200
-201)
A.
B.
C.
D.
E.

difference of needs of sellers between segments
feasibility of a marketing action to reach a segment
market size
simplicity and cost of assigning potential buyers to segments
(5) compatibility with the organization's objectives and resources.

Blooms: Understand
marketing actions.
8-148
162. Which of the following is a criterion used for selecting a target market?
(p. 200
-201)
A.
B.
C.
D.
E.

difference of needs of buyers between segments
expected growth of a segment
feasibility of a marketing action to reach a segment
simplicity and cost of assigning potential buyers to segments
(5) compatibility with the organization's objectives and resources. Although the
size of market in the segment may be small now, perhaps it is growing significantly
or is expected to grow in the future.

Blooms: Understand
marketing actions.
163. Which of the following is a criterion used for selecting a target segment?
(p. 200
-201)
A.
B.
C.
D.
E.

competitive position

Blooms: Understand
marketing actions.
8-149
164. Which of the following is a criterion used for selecting a target segment?
(p. 200
-201)
A.
B.
C.
D.
E.


Blooms: Understand
marketing actions.
165. Five general criteria are often used to select target segments. They include: (1) the
(p. 200 size of the market; (2) expected growth of the market; (3) competitive position of
-201)
the firm with respect to the market; (4) cost of reaching the segment; and
__________.
A.
B.
C.
D.
E.
compatibility with the organization's objectives and resources


Blooms: Understand
marketing actions.
8-150
166. It is not recommended that a firm select a target segment that

(p. 200
-201)
A.
would require entry in a global marketplace.
B.
requires more than one marketing action.
C.
has few competitors that target this same segment.
D. is incompatible with its company's goals or objectives.
E. has a growth potential that would require increasing the current workforce.

Blooms: Understand
marketing actions.
167. Best Foods Company is considering expanding beyond the regional market
(p. 200 segments now served by its Hellmann's mayonnaise. One criterion management
-201)
wants to use to evaluate potential new geographic market segments is whether
additional real estate must be purchased or leased to serve new segments. This is
an example of which criterion used to select target market segments?
A.
B.
C.
D.
E.
Best Foods' competitive position in the segment

Best Foods' product groupings
expected growth of the market segment
size of the market segment
New real estate to reach a new market segment can be too costly to justify the
strategy, an example of the cost of reaching the segment.

Blooms: Apply
marketing actions.
8-151
168. A rehabilitation center wants to target women in their 20s who have received
(p. 200 some permanent disability as the result of a skiing accident. In terms of the criteria
-201)
used for selecting a target segment, this market would
A.
B.
C.
D.
E.
have no expected growth.

not be compatible with the company's current resources.
not be worth doing since its market size is very small.
not be readily accessible to the firm's marketing programs.
be relatively expensive to reach.
This market could grow, albeit slowly, as women continue skiing, some of who will
likely need the rehabilitation services that the company provides. However, this
segment is probably too small for the rehabilitation center to develop a marketing
program to reach it.

Blooms: Apply
marketing actions.
169. During its market segmentation process for the Nike LeBron X basketball shoe,
(p. 200 which sells for $200+ a pair, Nike decided to concentrate on affluent teens rather
-201)
than members of high school basketball teams. This is an example of
A.
selecting target market segments to reach.
B.
forming products to be sold into groups.
C. developing a market-product grid and estimating size of markets.
D.
taking marketing actions to reach target markets.
E.
forming prospective buyers into segments.
A decision to concentrate on affluent teenagers is the selection of a target market
segment.

Blooms: Apply
marketing actions.
8-152
170. Doris Lewis owns Lewis Edibles, Inc., a company that makes Tongue Tinglin' BBQ
(p. 201 Sauce. She wants to target local people who like the special blend of flavors found
)
only in North Carolina barbecue sauce. In developing a marketing strategy to sell
the sauce, Lewis decided to join Goodness Grows in North Carolina, a specialty
food association that advertises local products and distributes them to local
supermarkets and gourmet shops. Lewis has just
A. formed a market segment using critical product features.

B.
formed products to be sold into groups.
C. developed a market-product grid and estimating size of markets.
D. taken a marketing action to reach a target market segment.
E.
formed prospective buyers into segments.
The final step in the market segmentation process is taking marketing actions to
reach target markets. This can be accomplished by joining the food association
that will assist her in two aspects of the marketing program - advertising and
distribution.

Blooms: Apply
marketing actions.
Topic: Taking marketing actions
Figure 8-7
8-153
(p. 201 large urban university campus with chosen market segments and product
)
groupings. The next step is to develop a simple marketing action to reach a target
market. Placing flyers under windshield wipers of cars parked in student parking
lots on weekdays between 7:00 a.m. and 4:00 p.m. that offer a $2 off coupon on
lunch meal would be especially targeted at potential
A.
B.
C.
D.
E.
faculty customers.
staff customers.
day commuter customers.
nonstudent customers.
Market segments comprise the horizontal rows in Figure 8-7. Cars parked in
student parking lots between 7:00 a.m. and 4:00 p.m. generally belong to day
commuter students - the target market for the marketing action.

Blooms: Apply
marketing actions.
(p. 201 large urban university campus with chosen market segments and product
)
groupings. The next step is to develop a simple marketing action to reach a target
market. Sending out coupons for 10 percent off all purchases between 2:00 p.m.
and 4:30 p.m. during the winter quarter would target potential
A.
B.
C.
D.
E.
dormitory customers.
between-meal snack customers.
after-dinner snack customers.
apartment customers.
The target here is potential between-meal snack customers, who might be reached
by this coupon that is intended to increase sales during the 2:00 p.m. and 4:30
p.m. time period. This is a product grouping or "meal" in the market-product grid, a
vertical column in Figure 8-7.

Blooms: Apply
marketing actions.
8-154
173. Which of the following competitors mentioned in the textbook should the owner of
(p. 202 a Wendy's restaurant monitor closely due to its explosive growth in the number of
)
current and proposed locations - one that is or may soon be near this Wendy's?
A.
B.
C.
D.
E.
Burger King
In-N-Out Burger
McDonald's
Five Guys Burgers
Smashburger
From 2003 to 2012, Five Guys Burgers exploded, with more than 1,000 locations
nationwide and 1,500 new restaurants planned.

Blooms: Understand
marketing actions.
Topic: Wendy's competition
174. When considering the quick-service restaurant competition, it will be most

(p. 203 important for Wendy's to consider not only the offerings of Burger King,
)
McDonald's, Five Guys Burgers, and other hamburger chains but also the
A.
B.
C.
D.
E.
meals at golf and country clubs.

dormitory meal plans at surrounding colleges and universities.
items for sale at gas stations and convenience stores.
local farmer's markets that sell produce.
nearly every food item sold at local grocery stores.
In considering the competition, Wendy's must include the nonhamburger chains.

Many are now selling food items and trying to gain market share from the Big
Three. These include convenient store chains like 7-Eleven, coffee shops like
Starbucks, smoothie outlets like Jamba Juice, and gas stations with prepared and
reheatable packaged food.

Blooms: Understand
marketing actions.
Topic: Wendy's competition
8-155
175. In the early 1980s, Apple, Inc. was often called "Camp Runamok" because
(p. 204
)
A. every employee was encouraged to do his or her own thing.

B. it was concentrating on laptops while everyone else was concentrating on
personal computers.
C. all the employees were so young, so they often played more than they worked.
D. there were no coherent product lines targeted at identifiable market segments.
E. its personal computers were running amok with viruses, spyware, and other
problems.
There were no coherent product lines targeted to identifiable market segments.
Apple's lack of a segmentation strategy in the early 1980s and its current
segmentation strategy are compared in the Marketing Matters box.

Blooms: Understand
marketing actions.
Topic: Marketing matters: Apple
Apple Market-Product Grid
8-156
176. In the Apple market-product grid shown above for its personal computer line, the
(p. 203 professional segment of medium/large businesses seems willing to purchase all of
-204)
the items in Apple's product line. This allows Apple to enjoy cost savings due to
__________.
A.
B.
C.
D.
E.
segment differentiation
marketing synergies
product synergies
segment repositioning
Running horizontally across the grid, each row represents an opportunity for
efficiency in terms of a market segment. Were Apple to focus on just one group of
customers, such as the professional medium/large business segment, its
marketing efforts could be streamlined. Apple could probably create a single ad to
reach this target segment.

Blooms: Understand
marketing actions.
Topic: Market-product synergies
177. According to the Apple market-product grid above, Apple would most likely get the
(p. 204 LEAST market synergies from
)
A.
B.
C.
D.
E.
teachers and college staff.

individuals and small home office users.
medium/large businesses and college faculty.
students, teachers, and college faculty.
creative professionals.
The (1) teachers and (2) college staff segments primarily uses only two products
(albeit different ones), whereas the other segments could use three or more of
these products (albeit different ones).

Blooms: Apply
marketing actions.
8-157
178. In the Apple market-product grid shown above for its personal computer line, the
(p. 204 iMac is popular among all the segments Apple can target. This allows Apple to
)
enjoy __________.
A.
B.
C.
D.
E.
segmentation synergies
marketing synergies
product synergies
the 80/20 rule
frequency marketing
If Apple wanted to simplify its product line, reduce R&D and production expenses,
and manufacture only one computer it might do well to focus on the iMac because
each segment purchases it.

Blooms: Understand
marketing actions.
179. According to the Apple market-product grid above, Apple would most likely get the
(p. 204 LEAST product synergies from the
)
A.
B.
C.
D.
E.
Mac Pro and MacBook Pro.

Mac Pro and iMac.
Mac Pro and MacBook Air.
Mac Pro and Mac Mini.
iMac and Mac Mini.
The Mac Pro and Mac Mini products are designed to serve the needs of only two or
three market segments, whereas the other products are designed to serve five or
more segments.

Blooms: Apply
marketing actions.
8-158
180. Two key types of synergies are __________.

(p. 203
)
A.
B.
C.
D.
E.
supplier and distributor synergies

market and product synergies
industry-dominated and consumer-dominated
product and production synergies
consumer and market synergies
Recognizing opportunities for key synergies or efficiencies are vital to success in

selecting target market segments and making marketing program decisions. Two
key synergies are marketing and product - in the form of research and
development (R&D) and production/manufacturing/operations.

Blooms: Understand
marketing actions.
181. Marketing synergies often come at the expense of product synergies because
(p. 204
)
A. product synergies are more effective for penetrating a market rather than
creating one.
B. multiple market segments usually require multiple products.
C. it is easier to change a product than to completely develop a new marketing
plan.
D. a single customer segment will likely require a variety of products.
E.
no company can afford to do both at the same time.
Marketing synergies often come at the expense of product synergies because a
single customer segment will likely require a variety of products, each of which will
have to be designed and manufactured.

Blooms: Understand
marketing actions.
8-159
182. __________ often come at the expense of __________ because a single customer
(p. 204 segment will likely require a variety of products, each of which will have to
)
designed and manufactured.
A.
B.
C.
D.
E.
Product synergies; marketing synergies

Marketing synergies; product synergies
Supplier synergies; consumer synergies
Distributor synergies; supplier synergies
Marketing synergies; finance synergies
Marketing synergies often come at the expense of product synergies because a

single customer segment will likely require a variety of products, each of which will
have to be designed and manufactured.

Blooms: Understand
marketing actions.
183. The place a product occupies in consumers' minds on important attributes relative
(p. 205 to competitive products is referred to as
)
A.
B.
C.
D.
E.
relative positioning.
competitive positioning.
selective perception.
Key term definition - product positioning.

Blooms: Remember
Topic: Product positioning
8-160
184. Product positioning refers to

(p. 205
)
A. an outdated concept that assigns product value by association with social

class.
B. the place a product offering occupies in consumers' minds on important
attributes.
C. the competitive advantage of one product over another.
D. changing the place a product occupies in a consumer's mind relative to
E. using a market-product grid to place products in their appropriate places on
that grid to identify potential untapped markets.
Key term definition - product positioning.

Blooms: Remember
185. Changing the place an offering occupies in consumers' minds relative to

(p. 205 competitive products is referred to as
)
A.
B.
C.
D.
E.
product placement.
perceptual mapping.
Key term definition - product repositioning.

Blooms: Remember
Topic: Product repositioning
8-161
186. Product repositioning refers to

(p. 205
)
A. the place a product offering occupies in consumers' minds on important

attributes.
B. using a market-product grid to place products in their appropriate places on
that grid to identify potential untapped markets.
C. changing the place an offering occupies in consumers' minds relative to
D. the practice of selling off a firm's least successful product line and redirecting
that revenue into a totally new product.
E.
the competitive advantage of one product over another.
Key term definition - product repositioning.

Blooms: Remember
187. Recently, U.S. dairies, struggling to increase milk sales, tried to change the way
(p. 205 adults thought about chocolate milk. The dairies wanted to __________ chocolate
)
milk in the minds of adult consumers.
A.
B.
C.
D.
E.
segment
differentiate
explain
promote
reposition
Changing the place an offering occupies in consumers' minds is called

repositioning. The dairy industry tried to reposition chocolate milk in the minds of
adult consumers.

Blooms: Understand
8-162
188. Mott's used an advertising campaign to change the way consumers thought about
(p. 205 its applesauce from a dinnertime side dish to a replacement for cooking oil in
)
baking. The advertising message was that using applesauce in baking cuts calories
and makes the resulting baked good healthier. Mott's used a __________ strategy.
A.
B.
C.
D.
E.
perceptual mapping
product positioning
psychographic
Product repositioning changes the place a product occupies in consumers' minds.

In this case, Mott's attempted to reposition its applesauce from a dinnertime side
dish to a healthy baking ingredient.

Blooms: Apply
189. Positioning that involves competing directly with competitors on similar product
(p. 205 attributes in the same target market is referred to as __________.
)
A.
B.
C.
D.
E.
position downsizing
product distinction positioning
Text term definition - head-to-head positioning.

Blooms: Remember
Topic: Head-to-head positioning
8-163
190. One approach to positioning a new product in a market is __________ positioning,

(p. 205 which involves competing directly with competitors on similar product attributes in
)
A.
B.
C.
D.
E.
perceptual
head-to-head
psychological
differentiation
market
Text term definition - head-to-head positioning.

Blooms: Remember
191. Head-to-head positioning requires a product to

(p. 205
)
A. compete with products from competitors of the same size and country of
origin.
B. compete with competitors on similar product attributes but in a different
market.
C. compete with competitors on similar product attributes in the same market.
D. compete against very similar products from its own company.
E. compete against a single competitor with an identical offering.
Head-to-head positioning involves competing directly with competitors on similar
product attributes in the same target market.

Blooms: Understand
8-164
192. In the athletic shoe market, Reebok and Nike practice __________ positioning since
(p. 205 both manufacturers vie for the same customers with technologically advanced
)
products.
A.
B.
C.
D.
E.
psychological
perceptual
differentiation
head-to-head
market
In the athletic shoe market, Nike and Reebok practice head-to-head positioning,
which involves competing directly with competitors on similar product attributes in

Blooms: Apply
193. A positioning approach that involves seeking a less competitive, smaller market
(p. 205 niche in which to locate a brand is referred to as __________.
)
A.
B.
C.
D.
E.
downsize positioning
Text term definition - differentiation positioning.

Blooms: Remember
Topic: Differentiation positioning
8-165
194. Differentiation positioning requires a product to

(p. 205
)
A. emphasize unique product attributes to compete directly with competitors.

B. compete directly with competitors on similar product attributes in the same
target market.
C. compete with competitors on similar product attributes but in a different
market.
D. seek a less-competitive, smaller market niche in which to locate a brand.
E. develop marketing actions to move a product or brand to an ideal position.
Differentiation positioning involves seeking a less competitive, smaller market
niche in which to locate a brand.

Blooms: Understand
195. In the sneaker business, Heelys practiced __________ positioning when it introduced
(p. 205 a line of Heelys sneakers that came with an imbedded, detachable wheel in the
)
shoe's heel marketed to young teens.
A.
B.
C.
D.
E.
head-to-head
parallel market
lateral
repositioning
differentiation
Differentiation positioning involves seeking a less competitive, smaller market

niche in which to locate a brand. Heelys used this strategy to compete in the kids
sneaker market with firms like Nike, Vans, Skechers, etc., when it made product
modifications (the wheel in the heel) to differentiate its shoes from those of its
competitors.

Blooms: Apply
8-166
196. Some Timex wristwatches can be purchased for less than $30 while Rolex
(p. 205 wristwatches may carry a price tag of several thousand dollars. In general,
)
consumers view Timex watches as being dependable, relatively accurate, and
inexpensive timepieces that can be purchased in drug stores, discount stores, and
department stores. The Rolex brand is perceived as an expensive status symbol
distributed in fine jewelry stores or specialty shops. By using distinctly different
pricing and distribution strategies, the marketers of Rolex watches
A. compete for the same segment through different channels of distribution.

B. develop similar products as Timex but under different names.
C.
use a differentiation positioning strategy.
D. compete for the same customers through similar retail outlets.
E. create cognitive dissonance in consumers who purchased Timex wristwatches.
Both the Timex and the Rolex wristwatches will satisfy consumers' basic need to
know the time of day. However, in order to compete in the wristwatch market,
each marketer has attempted to create a distinct product position in the minds of
consumers. The image of the Timex (dependable, relatively accurate, and
inexpensive) is very different from that of Rolex (an expensive status symbol).

Blooms: Apply
197. "For upscale American families who desire a carefree driving experience, Volvo is a
(p. 205 premium-priced automobile that offers the utmost in safety and dependability" is a
)
__________ statement for Volvo in North America.
A.
B.
C.
D.
E.
perception
positioning
market-product
vision
differentiation
Marketing managers often convert their positioning ideas for the offering into a
succinct written positioning statement. The positioning statement is used not only
internally within the marketing department, but also for others, outside it, such as
research and development engineers or advertising agencies. This is the Volvo
positioning statement for the North American market.

Blooms: Understand
8-167

Topic: Positioning statement
198. A means of displaying or graphing in two dimensions the location of products or

(p. 206 brands in the minds of consumers to enable a manager to see how consumers
)
perceive competing products or brands, as well as its own product or brand, is
referred to as a
A.
B.
C.
D.
E.
perception matrix.
perceptual map.
Key term definition - perceptual map.

Blooms: Remember
Topic: Perceptual map
199. A perceptual map refers to

(p. 206
)
A. a framework used to compare one firm's product offerings with another firm's
offerings in relationship to their relative market share.
B. a framework used to demonstrate the growth or decline of specific market
segments within an industry.
C. a means of displaying or graphing in two dimensions the location of products or
perceive competing products or brands, as well as its own product or brand.
D. a framework to relate the market segments of potential buyers to the products
E. the place a product occupies in a single consumer's mind on unimportant
attributes relative to competitive products.

Blooms: Remember
8-168
200. A graph displaying consumers' perceptions of product attributes in two dimensions

(p. 206 is referred to as a
)
A.
B.
C.
D.
E.
perceptual map.
perception matrix.

Blooms: Remember
201. Marketers use perceptual maps as a means to display or graph in two dimensions
(p. 206 the location of products or brands
)
A. against large market segments in a market-product grid.

B. against small market segments in a market-product grid.
C. in virtual space that represents the business or product's time in existence and
growth.
D.
in the minds of consumers.
E. against the revenues generated by other products or brands within the
company.
A perceptual map is a means of displaying or graphing in two dimensions the
location of products or brands in the minds of consumers to enable a manager to
see how consumers perceive competing products or brands, as well as its own
product or brand.

Blooms: Understand
8-169
202. A perceptual map enables a manager to see how __________ perceive competing
(p. 206 products or brands, as well as the firm's own product or brand.
)
A.
B.
C.
D.
E.
stakeholders
competitors
independent rating organizations such as Consumer Reports
consumers
the CEO of the firm

product or brand.

Blooms: Understand
203. The axes on a perceptual map are

(p. 206
)
A.
sales and profitability.
B. two product attributes, ranging from high to low on that attribute.
C.
market share and market growth rate.
D.
product variety and profitability.
E. customer perceptions of the firm's product versus the brand of the firm's
principal competitor.
A perceptual map is a means of displaying or graphing in two dimensions, the
see how consumers perceive competing products or brands as well as its own
product or brand. An attribute such as nutrition could be listed as high at one end
and low at the opposite end. See Figure 8-8.

Blooms: Understand
8-170
204. Which of these is collected from consumers to develop a product's perceptual

(p. 206 map?
)
A. consumer judgments about the important attributes for a product or brand

class
B.
a listing of all prospective brands and products
C. managerial judgments about how consumers perceive products
D. rank order of the ratings of an existing brand's preference relative to its
competitors
E. detailed explanations of why consumers make the choices they do
To develop a perceptual map, three types of data are needed: identification of
important attributes for a product or brand class; judgments of consumers about
existing products or brands with respect to these attributes; and identification of
where the company's product or brand is on these attributes in the minds of
potential customers. See Figure 8-8.

Blooms: Understand
205. To effectively positioning a product or brand, companies take four steps: (1)
(p. 205 __________; (2) discover how target customers rate competing products or brands
)
with respect to critical attributes; (3) discover where the company's product or
brand is on these attributes in the minds of potential customers; and (4) reposition
the company's product or brand in the minds of potential customers.
A. decide whether to keep or delete the market segment that your product
offering targets
C. identify the important attributes for the product or brand class
process
In determining positioning in the minds of customers, companies take four steps:
(1) identify the important attributes for the product or brand class; (2) discover
how target customers rate competing products or brands with respect to these
attributes; (3) discover where the company's product or brand is on these
attributes in the minds of potential customers; and (4) reposition the company's
product or brand in the minds of potential customers.

8-171

Blooms: Understand
(p. 205 identify the important attributes for the product or brand class; (2)__________; (3)
)
discover where the company's product or brand is on these attributes in the minds
of potential customers; and (4) reposition the company's product or brand in the
minds of potential customers.
A. decide whether to keep or delete the market segment that your product
offering targets
C. identify market niches that were not selected during the market segmentation
process
D. discover how target customers rate competing products or brands with respect
to these attributes
E. create a marketing plan based on customers' perceptions

Blooms: Understand
8-172
(p. 205 identify the important attributes for the product or brand class; (2) discover how
)
target customers rate competing products or brands with respect to these
attributes; (3) ___________; and (4) reposition the company's product or brand in
the minds of potential customers.
A. discover where the company's product or brand is on these attributes in the

minds of potential customers
B. decide whether to keep or delete the market segment that your product
offering targets
C. identify the competitors' brands that make up the consideration set
process

Blooms: Understand
8-173
Figure 8-A
208. Figure 8-A above is a depiction of a __________ for beverages in the minds of
(p. 206 adults.
)
A.
B.
C.
D.
E.
hierarchy of needs
perceptual map
marketing matrix
growth-share matrix
perception matrix

product or brand.

Blooms: Understand
8-174
209. The perceptual map in Figure 8-A above shows adult perceptions for beverages.
(p. 206 Suppose a marketer is introducing a new beverage that is higher-than-average in
)
nutrition and is intended for adults. It will probably be most useful to promote the
drink as similar to what?
A.
B.
C.
D.
E.
tea
fruit-flavored drinks
sugared soft drinks
regular milk
coffee
For the planned ads, the beverage producer should position its drink against drinks
in Figure 8-A that are high on the vertical nutrition axis and on the right, adultoriented. The most appropriate beverage for this comparison might be tea.

Blooms: Apply
210. Assume that the perceptual map in Figure 8-A is an accurate representation for
(p. 206 adult consumers. A heavy consumer of mineral water is likely to think that mineral
)
water is
A.
more nutritious than tea.
B. more nutritious and a more adult-oriented beverage than milk shakes.
C. a more adult-oriented beverage than nutritionally designed diet drinks.
D. less nutritious and a more adult-oriented beverage than fruit-flavored drinks.
E.
a more adult-oriented beverage than sports drinks.
Mineral water ranks as a more adult-oriented beverage on the horizontal axis than
sports drinks, so that is the correct answer.

Blooms: Apply
8-175
211. By dividing its tennis racquet market into three categories, which it labels
(p. 209 Performance, Recreational, and Junior tennis players, Prince Sports is using a
)
marketing strategy called
A.
B.
C.
D.
E.
product innovation.
market delineation.
product groupings.
Market segmentation involves aggregating prospective buyers into groups that (1)
have common needs and (2) will respond similarly to a marketing action. Market
segments are the relatively homogeneous groups of prospective buyers that result
from the market segmentation process - which helps Prince Sports develop
products with the features and at the prices that serve the different needs and
skills of the three categories or segments tennis players.

Blooms: Understand
Topic: Video case: Prince
212. The O3 technology refers to an innovative tennis racquet Prince Sports developed
(p. 209 that simultaneously delivers faster racquet speed and a bigger sweet spot in the
)
middle of the frame. Prince Sports has implemented a __________ strategy with its
O3 innovative tennis racquet technology.
A.
B.
C.
D.
E.
competitive segmentation
head-to-head
usage segmentation
market segmentation
Product differentiation involves a firm using different marketing mix activities, such
as product features, to help consumers perceive the product as being different and
better than competing products. By developing the O3 technology for the
Performance segment, Prince Sports is focusing on a product feature that provides
great feel, control, and spin, which both professional and amateur tennis players
are willing to pay for.

Blooms: Understand
8-176
213. The segmentation strategy used by Prince Sports today is

(p. 209
)
A.
B.
C.
D.
E.
geographic.
behavioral.
psychographic.
socioeconomic.
resource-based.
Behavioral segmentation is based on some observable actions of prospective

customers, such as the benefits they seek, which usually relates to the product
features they want - developed as part of the marketing program. Potential buyers
within a segment should be similar in terms of their needs and the resulting
marketing action, such as product features. Prince Sports segments on a
behavioral basis - trying to put features into its racquets that appeal to different
levels of players.

Blooms: Understand
Short Answer Questions
214. What is market segmentation and why is it important?

(p. 190
)

have common needs and will respond similarly to a marketing action.
Segmentation links needs to marketing actions. It stresses the importance of
aggregating - or grouping - people or organizations in a market according to the
similarity of their needs and the benefits they are looking for in making a
purchase. The needs and benefits to be satisfied must be related to specific,
tangible marketing actions in terms of the marketing mix variables (product, price,
promotion, and distribution), which the firm can control to satisfy the needs of
these segments.

Blooms: Understand
8-177

215. What is product differentiation? How does it relate to market segmentation? How
(p. 190 does it potentially improve a firm's revenues?
)
Product differentiation involves a firm using different marketing mix activities, such
being different and better than competing products. Differences may involve
nonphysical features as well, such as image or price. Thus, product differentiation
relates to market segmentation, where perhaps the same or similar target markets
are more likely to buy the product differentiated as having greater reliability or
lower price.

Blooms: Understand
216. Describe the market segmentation process.

(p. 190
)

the link between the various buyers' needs and the organization's marketing
program. Market segmentation first identifies market needs in terms of the product
features/benefits, cost, quality, and convenience consumers are looking for in
making a purchase. Second, such needs and benefits must be related to specific
marketing actions that the organization can take, such as a new product or special
promotion. Last, after an organization selects its target market segments, it can
then develop a marketing program - specific tactics for each of the 4Ps to reach
the segment. See Figure 8-1.

Blooms: Understand
Topic: Market segmentation process
8-178
217. Why would an organization produce a single product or service and then attempt
(p. 191 to sell it to two or more market segments?
)
An organization would produce a single product or service and then attempt to sell
it to two or more market segments to avoid the added cost of developing
additional versions of the product, which often entails high research and
development, engineering, and manufacturing expenses. In this case, the
incremental costs of taking the product into new market segments are typically
those of a separate promotional campaign or a new channel of distribution.
Although these expenses can be high, they are rarely as large as those for
developing an entirely new product.

Blooms: Understand
218. Why would an organization produce multiple products or services and then
(p. 192 attempt to sell them to two or more market segments?
)
Organizations may target different products or services to multiple market

segments. Producing these different products or services is clearly more expensive
than producing only one product or service but is effective if it meets customers'
needs better, doesn't reduce quality or increase price, and most importantly, adds
to the organization's sales revenues and profits.

Blooms: Understand
219. Explain the difference between mass customization and build-to-order.

(p. 192
-193)
Mass customization involves tailoring goods or services to the tastes of individual

customers on a high-volume scale. Build-to-order (BTO), upon which mass
customization is based, involves manufacturing a product only when there is an
order from a customer. In a BTO system, customers do not have an unlimited
number of product features they can choose from.

8-179
Blooms: Understand
220. There are five key steps in segmenting and targeting markets, which link market
(p. 194 needs of customers to the organization's marketing program. List these five key
)
steps.
The five key steps in segmenting and targeting markets are: (1) group potential
buyers into segments; (2) group products to be sold into categories; (3) develop a
market-product grid and estimate size of markets; (4) select target markets; and
(5) take marketing actions to reach target markets. See Figure 8-3.

Blooms: Understand
221. A marketing manager should develop segments for a market that meet five
(p. 194 principal criteria. List these important factors in forming market segments.
-195)
The five criteria are: (1) simplicity and cost-effectiveness of assigning potential
buyers to segments; (2) potential for increased profit and ROI; (3) similarity of
needs of potential buyers within a segment; (4) difference of needs of buyers
among segments; and (5) potential of a marketing action to reach a segment.

Blooms: Understand
8-180
222. A nonprofit food bank was handing out food to anyone who requested it on a
(p. 194 weekly basis. It now wants to give free food only to people who go hungry on a
-195)
daily basis. This will be the market segment it targets. How does the formation of
its market segments differ from the strategy used for a retail store?
There is one key difference between for-profit and not-for-profit organizations, and
that is the criterion related to the potential for increased profit and ROI. For
nonprofits, this criterion is replaced by the potential for serving clients' needs more
effectively while achieving the organization's goals.

Blooms: Apply
223. Describe the four general bases that are used to segment consumer markets.
(p. 195
-196)
The four general bases of segmentation are: (1) geographic segmentation, which
is based on where prospective customers live or work (region, city size); (2)
demographic segmentation, which is based on some objective physical (gender,
race), measurable (age, income), or other classification attribute (birth era,
occupation) of prospective customers; (3) psychographic segmentation, which is
based on some subjective mental or emotional attributes (personality), aspirations
(lifestyle), or needs of prospective customers; and (4) behavioral segmentation,
which is based on some observable actions or attitudes by prospective customers such as where they buy, what benefits they seek, how frequently they buy, and
why they buy.

Blooms: Understand
markets.
8-181
224. Assume you are manager of The Outback Steak House, a franchised restaurant
(p. 195 that has opened at new location in St. Louis. Describe which segmentation base(s)
-196)
and possible segmentation variable(s) you would use to segment its market and
explain why each supports the appropriate market segmentation strategy.
Students should choose from the segmentation base(s) may also apply
segmentation variable(s). The most likely basis of segmentation would be
geographic. The likely segmentation variables would be region (near St. Louis) and
city size or density (more urban than rural). Demographic variables could be used
based on the necessary income of at least $35,000 to afford the $10 to $25 per
person cost of a meal at Outback. Although a psychographic basis of segmentation
could be chosen, it would be too difficult and costly to select a psychographic
variable (like personality - extroverted, gregarious) to identify and assign
consumers into distinct segments and then develop marketing actions to reach
them - two criteria necessary to segment markets. With respect to behavioral
segmentation, usage status may be feasible if an effective customer
loyalty/frequency marketing program can be easily developed to identify and
classify the "heavy users" that would patronize Outback, say, more than once a
month, since repeat business is the key to success in the sit-down restaurant
industry.

Blooms: Apply
markets.
225. Explain the 80/20 rule.

(p. 196
)
Usage rate is sometimes referred to in terms of the 80/20 rule, a concept that
suggests 80 percent of a firm's sales are obtained from 20 percent of its
customers. The percentages in the 80/20 rule are not really fixed at exactly 80
percent and 20 percent, but suggest that a small fraction of customers provide a
large fraction of a firm's sales.

Blooms: Understand
markets.
Topic: 80/20 rule
8-182
226. What are the segmentation bases for U.S. organizational (business) markets?
(p. 197
-198)
Organizational (business) markets can be segmented by geographic, demographic,

or behavioral bases. A psychographic basis is not used for organizational market
segmentation.

Blooms: Understand
markets.
227. Explain what a market-product grid is and how it is used.

(p. 199
-200)

horizontal rows) and product groupings (or vertical columns). In a complete
market-product grid analysis, each cell in the grid can show the estimated market
size of a given product sold to a specific market segment.

Blooms: Understand
marketing actions.
228. What are the criteria used to select target markets?

(p. 200
-201)
There are two different kinds of criteria in the market segmentation process: those
used to (1) divide the market into segments and (2) actually pick the target
segments. Five criteria can be used to pick the target segments. They are: (1)
market size; (2) expected growth; (3) competitive position; (4) cost of reaching the
segment; and (5) compatibility with the organization's objectives and resources.

Blooms: Understand
marketing actions.
Topic: Selecting target markets
8-183
229. Explain the difference between marketing synergies and product synergies.
(p. 203
-204)
Synergy analysis seeks opportunities by finding the optimum balance between

marketing efficiencies versus product efficiencies and is vital to a marketer's
success in selecting target market segments and making marketing program
action decisions. Marketing synergies run horizontally across the rows in a marketproduct grid and represent an opportunity for efficiency in terms of a market
segment. Marketing efforts can be streamlined with a focus on fewer segments.
Product synergies run vertically down the columns in a market-product grid and
each column represents an opportunity for efficiency in research and development
and production. To simplify product lines and reduce R&D and production
expenses, a firm might only wish to manufacture one or a few products and could
determine which to make based on the number of segments with an interest in
that product. See the Apple Segmentation Strategy in the Marketing Matters box.

Blooms: Understand
marketing actions.
Topic: Marketing-product synergies
230. Define product positioning. What are two approaches to product positioning? Give
(p. 205 an example of each approach.
)
Product positioning refers to the place a product occupies in consumers' minds

based on important attributes relative to competitive products. There are two
major approaches to positioning a product. Head-to-head positioning involves
competing directly with competitors on similar product attributes in the same
target market. For example, Dollar Rental Cars compete head-to-head or directly
with Avis and Hertz. Differentiation positioning involves seeking a smaller market
niche that is less competitive in which to locate a brand. Companies also follow a
differentiation positioning strategy among brands within their own product line to
seek a less-competitive, smaller market niche in which to locate a brand. For
example, McDonald's tried to appeal to the health-conscious segment when it
introduced the low-fat McLean Deluxe hamburger a few years ago to avoid
competing directly with Wendy's and Burger King's (and its own) higher fat-content
offerings.

Blooms: Apply
8-184
231. What are the three types of data needed from consumers to develop a perceptual
(p. 205 map?
)
In determining a brand's position and the preferences of consumers, companies

obtain three types of data from consumers: (1) important attributes for a product
class; (2) judgments of target customers about existing products or brands with
respect to these attributes; and (3) where the company's product or brand is on
these attributes in the minds of potential consumers. See Figure 8-8.

Blooms: Understand
232. What are the four steps to positioning a product with a perceptual map?
(p. 205
)
A key to positioning a product or brand effectively is discovering the perceptions in

the minds of potential customers by taking four steps: (1) Identify the important
attributes for a product or brand class. (2) Discover how target customers rate
competing products or brands with respect to these attributes. (3) Discover where
the company's product or brand is on these attributes in the minds of potential
customers. (4) Reposition the company's product or brand in the minds of potential
customers. As shown in Figure 8-8, from these data it is possible to develop a
perceptual map, a means of displaying in two dimensions the location of products
or brands in the minds of consumers.
Blooms: Understand
8-185

TBChap 008

Transféré par

Informations du document

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

TBChap 008

Transféré par

Droits d'auteur :

Formats disponibles

Chapter 08

Market Segmentation, Targeting, and Positioning

Multiple Choice Questions

1. The company name Zappos was chosen because it

4. Which of the following statements about Zappos is most accurate?

A. Zappos limits its inventory to a selection of high-end fashion footwear.

identifies a completely new market segment with a product to match it.

7. Building open and honest relationships with communication is an example of Zappos'

9. Market segmentation refers to

A. the philosophy that to do a truly excellent job of marketing, a company should

increase sales and profitability.

respond similarly to marketing messages

pay attention to marketing messages.

16. Market segments refer to

18. To be identified as a market segment, members of the group must

A. be similar in terms of their consumption behavior.

22. Product differentiation refers to

A. a good, service, or idea consisting of a bundle of tangible and intangible attributes

self-regulatory industry standards

link needs to actions

link needs to actions

link needs to actions

to receive quick delivery of their merchandise.

33. A market-product grid refers to

A. a visual representation of all products offered within a specific product class.

35. A market-product grid is a framework to relate the __________ to products offered or

market segments of potential buyers

36. A market-product grid is a framework to relate the market segments of potential

stomach sleeper-firm pillow

maintain market share.

A. not consider market segmentation at this time.

A. is a much more effective means of meeting consumers' individual needs.

A. develop and produce another version of the product.

Harry Potter books Photo

multiple products with one segment

49. Which of the following is a disadvantage of employing a multiple products, multiple

conforms to all FDA guidelines.

conforms to all FDA guidelines.

55. Tailoring products or services to the tastes of individual customers on a high-volume

65. Organizational synergy is the increased customer value achieved through

A. performing organizational functions more efficiently.

A. Dell adds high-end speaker systems to its line.

a low-priced product to a high-income or high net worth segment.

74. Which of the following is an example of a Tiffany/Walmart strategy?

A. take marketing actions to reach target markets

eliminate potential non-buyers

A. difference of needs of buyers among segments.

A. similarity of segments to competitors' segments

87. The best segmentation approach is the one that

A. The ability to assign buyers to a segment is simple and cost-effective.

The ability to assign buyers to a segment is cost-effective and simple.

increase the advertising budget

A. Within a segment, the needs of potential buyers should be different; among

A. different needs of buyers among different segments

96. Segmentation based on where prospective customers live or work is referred to as

zip code segmentation.

99. Which of the following statements best illustrates geographic segmentation?

A. GE builds a downsized microwave oven to hang under kitchen cabinets.

102 Which of the following is a consumer demographic segmentation variable?

111 All of the following are psychographic segmentation variables EXCEPT:

115 Nielsen PRIZM segmentation classifies every household into one of 66

116 Segmentation based on some observable actions or attitudes by prospective

119 Behavioral segmentation may be based on